Which Statement Best Describes the Relationship Between the Nominal Interest

question 16

Multiple Choice

Which statement best describes the relationship between the nominal interest rate and the real interest rate?

• A) The real interest rate is the nominal interest rate times the rate of inflation.
• B) The real interest rate is the nominal interest rate minus the rate of inflation.
• C) The real interest rate is the nominal interest rate plus the rate of inflation.
• D) The real interest rate is the nominal interest rate divided by the rate of inflation.

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Definitions:

Random Assignment

A method used in experiments to ensure that every participant has an equal chance of being assigned to any given group.

Experimental Group

The group in an experiment that receives the treatment or intervention, used to assess the treatment's effect.

Control Group

A group in an experiment or study that does not receive treatment by the researchers and is used as a benchmark to measure how the other tested subjects do.

Correlational Studies

A type of non-experimental research method in which a researcher measures two variables, understands and assesses the statistical relationship between them without any causal assumption.