An Increase in the Anticipated (Or Expected) Rate of Inflation

question 140

Multiple Choice

An increase in the anticipated (or expected) rate of inflation will cause the nominal interest rate to

• A)increase by less than the change in the anticipated inflation rate.
• B)increase by the same amount as the change in the anticipated inflation rate.
• C)decrease by more than the change in the anticipated inflation rate.
• D)decrease by the same amount as the change in the anticipated inflation rate.
• E)stay the same.

---

Definitions:

Pacific Halibut

A species of flatfish found in the North Pacific Ocean, valued for commercial and recreational fishing.

Quota

A government-imposed trade restriction that limits the number or value of goods that can be imported or exported during a specific time.

ITQs

Individual Transferable Quotas, a regulatory tool in environmental policy that limits the total allowable catch in fishing, with quotas that can be bought, sold, or leased among fishermen.

Sockeye Salmon

A species of salmon found in the Pacific Ocean, highly valued for its flavor and nutritional content, often considered a delicacy.