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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Definitions:

Task Goals

Specific objectives or targets set for tasks or activities, focusing on the completion and achievement of individual assignments.

Properly Set

Correctly established or arranged according to specified guidelines or principles.

Expectancy Theory

A motivational theory that suggests an individual's behavior is determined by their expected outcomes or rewards, based on the belief that effort leads to performance and performance leads to rewards.

High Instrumentality

The belief that performance will lead directly to desirable outcomes, an essential concept in expectancy theory of motivation.