When Seen from an Airplane, a Rainbow Sometimes Forms a Complete

question 48

Multiple Choice

When seen from an airplane, a rainbow sometimes forms a complete circle. When this happens, the plane's shadow is

• A) in the lower part of the rainbow.
• B) in the center of the rainbow.
• C) in the upper part of the rainbow.
• D) totally outside the rainbow.
• E) nowhere, for there is no shadow.

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Definitions:

Nominal Interest Rate

The interest rate actually paid for a loan, not adjusted for inflation.

Hyperinflation

A very high and typically accelerating rate of inflation, often exceeding 50% per month, leading to a rapid erosion of real value in the local currency.

Depression

A severe and prolonged downturn in economic activity, characterized by significant declines in GDP, high unemployment, and deflation.

Money Demand

The total amount of money that households and businesses want to hold at any given time, depending on interest rates, income levels, and economic activity.