If We Look at Real and Nominal Interest Rates in the United

question 3

Multiple Choice

If we look at real and nominal interest rates in the United States since 1968, we see that

• A) the nominal interest rate has always been less than the real interest rate because of inflation.
• B) the real interest rate has almost always been less than the nominal interest rate because of inflation.
• C) at times the nominal interest rate has been greater than the real interest rate and at times has been less than it.
• D) the difference between the nominal and real interest rates has widened during the 1990s because of inflation.
• E) both the nominal and real interest rates were negative in the highly inflationary 1970s.

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