Which of the Following Equations Is Correct

question 122

Multiple Choice

Which of the following equations is correct?

• A) Expected real interest rate = Nominal interest rate + Expected inflation rate.
• B) Expected real interest rate = Nominal interest rate ÷ Expected inflation rate.
• C) Expected real interest rate = Expected inflation rate ÷ Nominal interest rate.
• D) Expected real interest rate = Nominal interest rate ‒ Expected inflation rate.

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Definitions:

Antitrust Policy

A set of laws and regulations aimed at promoting competition and preventing monopolies and unethical business practices.

Department of Justice

A U.S. government's federal department tasked with law enforcement and the management of justice.

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A law enacted in 1933 to separate commercial banking from investment banking, aimed at reducing conflicts of interest and systemic risks.