If the Inflation Rate Is Zero, Then

question 361

Multiple Choice

If the inflation rate is zero, then

• A)both the nominal interest rate and the real interest rate can fall below zero.
• B)the nominal interest rate can fall below zero, but the real interest rate cannot fall below zero.
• C)the real interest rate can fall below zero, but the nominal interest rate cannot fall below zero.
• D)neither the nominal interest rate nor the real interest rate can fall below zero.

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