For a Given Year, the Nominal Interest Rate Is 9

question 65

Multiple Choice

For a given year, the nominal interest rate is 9 percent, and inflation rises to 11 percent, a 4 percent higher rate than anticipated. Which group of people is made better off by the increase in the inflation rate?

• A) Those who lend at fixed interest rates
• B) Those who borrow at fixed interest rates
• C) Those who borrow at variable interest rates
• D) Those who receive fixed incomes
• E) Those who save at variable interest rates

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Definitions:

Sigmund Freud

An Austrian neurologist and the founder of psychoanalysis, a clinical method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Rorschach

A projective psychological test consisting of inkblots presented to a subject, the interpretations of which are used to assess personality characteristics and emotional functioning.

Validity And Reliability

Terms used to evaluate the quality of research or measurement tools, where validity refers to how well a test measures what it claims to measure and reliability refers to the consistency of the test results over time.

Mixed

Refers to a combination or blend of different elements, characteristics, or types, often resulting in a state of being not clearly defined by a single category.