If the Nominal Interest Rate Exceeds the Rate of Inflation

question 74

Multiple Choice

If the nominal interest rate exceeds the rate of inflation, the real interest rate will

• A)not be affected.
• B)rise.
• C)be greater than zero.
• D)be less than zero.
• E)fall.

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Definitions:

Demand Factors

Elements that influence the quantity of a product or service that consumers are willing and able to purchase, including price, income levels, and consumer preferences.

Macroeconomic

Relating to the branch of economics that studies the behavior and performance of an economy as a whole, including topics like unemployment, GDP, and inflation.

High-priced

Relating to items or commodities that are sold at a price above the average market value.

Customer Demand

The quantity and type of goods or services that consumers are willing and able to purchase at various prices during a certain period of time.