In Year 1 the Price Level Is Constant and the Nominal

question 132

Multiple Choice

In year 1 the price level is constant and the nominal rate of interest is 6 percent. But in year 2 the inflation rate is 3 percent. If the real rate of interest is to remain at the same level in year 2 as it was in year 1, then in year 2 the nominal interest rate must

• A)rise by 9 percentage points.
• B)rise by 3 percentage points.
• C)fall by 3 percentage points.
• D)rise by 6 percentage points.

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Definitions:

Situational Approach

A leadership model that suggests the most effective approach to leadership depends on the specific circumstances or context.

Trait Approach

A theoretical framework in psychology that attributes patterns of behavior and personality to stable characteristics or traits within an individual.

Fluid

Characterized by the ability to flow and adapt smoothly in various situations; often used to describe flexible thinking or variable structures.

Positive About Job

Having a positive outlook or attitude towards one's job, usually reflecting satisfaction, motivation, and engagement at work.