In the Long Run, the Real Interest Rate Is 3

question 15

Multiple Choice

In the long run, the real interest rate is 3 percent, real GDP grows at 4 percent, velocity is constant, and the quantity of money grows at 6 percent.The nominal interest rate is

• A) 3 percent.
• B) 4 percent.
• C) 5 percent.
• D) 10 percent.
• E) 6 percent.

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Definitions:

Conveys

Transfers ownership or title of property or rights from one person or entity to another.

Nonpossessory Interest

In the context of real property, an interest that involves the right to use land but not the right to possess it.

Easement

A right granted to use another's property for a specific purpose, such as right of way or utility installation.

Possess

To have or hold property, assets, or rights, either legally or physically.