Which of the Following Statements Is Correct

question 42

Multiple Choice

Which of the following statements is correct?

• A) If the inflation rate is steady at 5 percent, for example, the real and nominal interest rates will be equal.
• B) An increase in the demand for goods now compared with goods in the future would cause the real interest rate to rise.
• C) A "positive rate of time preference" means that an individual would rather save than consume.
• D) During an extended inflationary period, the money (or nominal) interest rate will usually be lower than the real rate of interest.

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