Which of the Following Is the Most Accurate Statement About

question 39

Multiple Choice

Which of the following is the most accurate statement about real and nominal interest rates?

• A) Real interest rates can be either positive or negative, but nominal interest rates must be positive.
• B) Real interest rates and nominal interest rates must be positive.
• C) Real interest rates must be positive, but nominal interest rates can be either positive or negative.
• D) Real interest rates and nominal interest rates can be either positive or negative.

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Definitions:

Expected Rates

Anticipated figures or percentages, often pertaining to finance, such as interest rates or returns on investment.

MU/P

The ratio of marginal utility to price, used to measure the additional satisfaction gained per unit of currency spent.

Competing Products

Goods or services that serve as alternatives to each other, satisfying the same need or want, and thus compete in the same market.

Elastic Demand

A condition where the quantity demanded of a good or service significantly changes due to a change in its price.