If the Nominal Interest Rate Is Greater Than the Real

question 72

Multiple Choice

If the nominal interest rate is greater than the real interest rate,

• A)it is an indication of economic growth.
• B)inflation must be occurring.
• C)lenders must lose because they can only make loans using the real interest rate.
• D)the real interest rate must be negative.
• E)None of the above answers is correct because it is not possible for the nominal interest rate to exceed the real interest rate.

Understand the concept of fixed, variable, and mixed costs.

Apply the high-low method to determine fixed and variable components of costs.

Identify the behavior of variable costs per unit with changes in production levels.

Determine the impacts of cost behavior on product pricing and profitability.

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