The Nominal (Money) Rate of Interest

question 124

Multiple Choice

The nominal (money) rate of interest

• A) is the real rate of interest plus the inflationary premium.
• B) can be expected to decline as inflation accelerates.
• C) fell to historic lows during the 1970s when the United States experienced double-digit rates of inflation.
• D) can be expected to increase when the government is running a budget surplus.

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