If the Real Interest Rate Is 5%,the Rate of Inflation

question 36

Multiple Choice

If the real interest rate is 5%,the rate of inflation in the United States is 6%,and the rate of inflation in the United Kingdom is 3%,which of the following statements would NOT be true?

• A) The nominal rate of interest in the U.S. would be greater than the nominal interest rate in the U.K.
• B) The difference between the U.K. and U.S. interest rates is a function of the difference between their inflation rates.
• C) The nominal rate of interest in the United States and the United Kingdom would be the same because of purchasing power parity.
• D) Investors would get a higher return on their money in the United States.

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Definitions:

Leader Courage

The attribute of leaders that enables them to confront fear, pain, danger, uncertainty, or intimidation within their leadership roles.

Humility

A personal quality characterized by a lack of arrogance or pride and a recognition of one's limitations and the value of others.

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The process of increasing the capacity of individuals to make choices and to transform those choices into desired actions and outcomes.