If Both the Real Interest Rate and the Nominal Interest

question 249

Multiple Choice

If both the real interest rate and the nominal interest rate are 3 percent, then the

• A) inflation premium is zero.
• B) real GDP must exceed the nominal GDP.
• C) nominal GDP must exceed the real GDP.
• D) inflation premium also is 3 percent.

---

Definitions:

Coffee Fund

A colloquial term used to describe a small, informal collection of money among a group of people for the purchase of communal coffee or similar shared resources in an office or team environment.

Free Rider

An individual or entity that benefits from resources, goods, or services without paying for their cost, often leading to issues in public goods provision.

Public Goods Dilemma

A type of social dilemma in which individuals incur the cost to contribute to a collective resource, though they may never benefit from that resource.

National Public Radio

A nonprofit media organization that serves as a national syndicator to a network of public radio stations in the United States, offering news, cultural programs, and educational content.