If the Nominal Interest Rate Is Less Than the Real

question 1

Multiple Choice

If the nominal interest rate is less than the real interest rate,we know that

• A)both the nominal or real interest rate must be negative.
• B)the nominal interest rate must be equal to expected inflation.
• C)expected deflation must be occurring.
• D)expected inflation must be positive.
• E) expected inflation must be zero.

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Definitions:

Goods In Transit

Merchandise or inventory items that have been shipped by a seller but not yet received by the buyer, often considered in inventory counts.