If Borrowers and Lenders Expect a Higher Rate of Inflation

question 58

Multiple Choice

If borrowers and lenders expect a higher rate of inflation,

• A)nominal interest rates should decrease.
• B)nominal interest rates should remain constant.
• C)nominal interest rates should increase.
• D)real interest rates should increase.

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Definitions:

Civil Action

A legal proceeding in which a plaintiff sues a defendant to resolve a non-criminal dispute.

Intrastate Offering Exemption

A legal exemption allowing securities to be sold within a single state without needing to register with the federal Securities and Exchange Commission.

Rule 147

A regulation under the U.S. Securities Act of 1933, facilitating companies to raise funds from investors within their state without registering the offer with the SEC.

Intrastate Resale

The sale of goods or services within the same state, not crossing state boundaries.