If the Nominal Interest Rate in an Economy Is 4

question 158

Multiple Choice

If the nominal interest rate in an economy is 4 percent and the real interest rate in the economy is 2 percent,the rate of inflation in the economy must be ________.

• A) 2 percent
• B) 4 percent
• C) −2 percent
• D) 0.5 percent

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Definitions:

Commercial Losses

Financial losses experienced by a business entity due to various factors such as theft, damage, or unfavorable business conditions.

Prima Facie Unconscionable

A situation that appears unjust or extremely one-sided in favor of one party over another at first glance.

Remedies

Judicial methods used to uphold a right or address, remedy, or compensate for its infringement.

Commercial Sales Agreement

A contract between two parties in which goods are sold from the seller to the buyer under agreed terms.