The Nominal Interest Rate Increases by 5 Percent

question 121

Multiple Choice

The nominal interest rate increases by 5 percent.What is the effect on investment?

• A)The real interest rate increases and investment increases
• B)​The real interest rate decreases and investment decreases.
• C)​The real interest rate increases and investment decreases.
• D)​Cannot be determined from the given information

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Definitions:

Wagner Act

A foundational piece of labor legislation in the United States, officially known as the National Labor Relations Act of 1935, that established the rights of workers to form unions and engage in collective bargaining.

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National Labor Relations Board

A federal agency of the United States responsible for enforcing US labor law in relation to collective bargaining and unfair labor practices.