If an Increase in Expected Inflation Equally Raises the Nominal

question 117

Multiple Choice

If an increase in expected inflation equally raises the nominal interest rate,the expected real interest rate ________ and thus investment demand ________.

• A)rises,increases
• B)rises,decreases
• C)is unchanged,is unchanged
• D)falls,increases
• E)falls,decreases

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Definitions:

Vicarious Liability

Legal responsibility assigned to an individual or entity for the actions of another, based on a particular relationship, such as employer-employee.

Ratification Manifest

The overt expression or demonstration of approval or confirmation of an act or agreement, often legally required for ratification.

Material Facts

Information that could influence the decision-making process of a person or entity, considered significant in the context of legal and financial transactions.

Apparent Authority

A legal doctrine allowing a third party to rely on the representation of an agent that they have the authority to act on behalf of a principal, even if the agent lacks actual authority.