An Increase in the Real Interest Rate Will

question 177

Multiple Choice

An increase in the real interest rate will

• A) increase the inflationary premium.
• B) decrease the inflationary premium.
• C) increase the price of current consumption relative to future consumption.
• D) decrease the price of current consumption relative to future consumption.

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Definitions:

Universal Generalization (UG)

A principle in logic where a statement applies to all members of a category or class.

Existential Generalization (EG)

A logical inference rule that allows for the conclusion that at least one member of a domain possesses a certain property, based on evidence of a specific instance.

Denying the Antecedent (DN)

A logical fallacy where one assumes that if the antecedent in a conditional statement is not true, the consequent must also not be true.

Disjunctive Syllogism (DS)

A form of logical argument where, if one has a disjunction (A or B) and knows that A is not true, one can conclude B must be true.