If the Nominal Interest Rate Is 5 Percent and There

question 108

Multiple Choice

If the nominal interest rate is 5 percent and there is no inflation,_____.

• A)the real interest rate exceeds 5 percent
• B)the real interest rate is less than 5 percent
• C)the real interest rate is 5 percent
• D)there is not enough information to determine the real interest rate
• E)the real interest rate is zero

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the amount of the good that consumers are willing to purchase at that price, ceteris paribus.

Zero Price

Refers to a situation where a good or service is offered without requiring payment; often to promote sharing or distribution efficiency.

Marginal Utility

The supplementary satisfaction or advantage a consumer experiences by using one more unit of a good or service.

Diminishing

Refers to the principle where additional units of input result in progressively smaller increases in output, often applied in the context of diminishing marginal returns in production.