The Real Interest Rate Is Negative If the Inflation Rate

question 33

Multiple Choice

The real interest rate is negative if the inflation rate

• A)is equal to the nominal interest rate.
• B)equals zero.
• C)exceeds the real interest rate.
• D)exceeds the nominal interest rate.
• E)is less than the nominal interest rate.

---

Definitions:

Current Liability

Financial obligations a company owes and is expected to pay within a year.

Long-term Liability

A debt or obligation not due within the current accounting year, requiring repayment over a longer period.

Warranty Repairs

Services provided to repair or fix products free of charge under a warranty agreement, considered a contingent liability when the product is sold.

Parts Inventory

The stock of components or parts kept on hand by a company to assemble products or perform service maintenance.