If the Nominal Interest Rate Increases Without Any Change in the Rate

question 85

Multiple Choice

If the nominal interest rate increases without any change in the rate of inflation in an economy,________.

• A) the real interest rate in the economy decreases
• B) the real interest rate in the economy increases
• C) the real interest rate in the economy remains the same
• D) the ratio of real interest rate to nominal interest rate increases

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Definitions:

Elemental Symbol

A one- or two-letter notation derived from the name of an element, used as a shorthand representation in chemical equations and formulas.

Sodium

A soft, silvery-white, highly reactive metal of the alkali metal group, denoted by the symbol Na, primarily found in salt (sodium chloride, NaCl) in the Earth's oceans and in mineral deposits.

Elemental Symbol

A short representation using letters to signify a chemical element on the periodic table.

Mercury

A heavy, silvery d-block element, also known as quicksilver, that is liquid at room temperature and used in thermometers, barometers, and batteries.