In the United States During the Late 1970s,the Nominal Interest

question 60

Multiple Choice

In the United States during the late 1970s,the nominal interest rates were quite high,but the real interest rates were negative. From the Fisher equation,we can conclude that expected inflation in the United States during this period was

• A)irrelevant.
• B)low.
• C)negative.
• D)high.

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Definitions:

Scarce Resources

Natural, human, and man-made inputs that have limited availability and are used for the production of goods and services.

Efficiency

The optimal use of resources to achieve the desired outcome with minimum waste or effort.

Redistributing Income

The transfer of income from certain individuals or groups to others through mechanisms like taxation, social security, and welfare programs, aiming at reducing income inequality.

Tradeoff

An exchange where one quality or aspect must be given up in order to gain another quality or aspect.