The Tendency for Nominal Interest Rates to Be High When

question 130

Multiple Choice

The tendency for nominal interest rates to be high when inflation is high and low when inflation is low is known as:

• A)the consumer price index.
• B)deflating.
• C)shoe leather costs.
• D)the Fisher effect.

---

Definitions:

Federal Revenues

Income received by the federal government from taxes, fees, and other sources.

Annually Balanced Budget

A fiscal strategy or policy where government revenues are planned to match expenditures within a single year, aiming to prevent budget deficits.

Tax Revenues

Tax revenues refer to the income that is collected by the government from individuals and businesses, primarily through taxes such as income tax, sales tax, and property tax.

Government Spending

Government spending encompasses all the expenditures of government agencies and departments, including investments, consumption, and transfers, aimed at achieving economic and social objectives.