If the Nominal Interest Rate Is Above the Equilibrium Value

question 66

Multiple Choice

If the nominal interest rate is above the equilibrium value, then the quantity demanded of money is ________ than the quantity supplied of money, bond prices will ________, and the nominal interest rate will ________.

• A)greater; fall; increase
• B)less; rise; decrease
• C)greater; rise; increase
• D)less; fall; increase

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Definitions:

Passive Investment Strategy

A strategy in investing that involves minimal buying and selling actions, typically focused on long-term investment in indexes or funds that mirror market performance.

Complete Portfolio

A diversified collection of investment assets that covers a wide range of asset classes and investment vehicles, aiming to reduce risk through diversification.

Risky Assets

Assets that come with a higher degree of investment risk, typically with the potential for higher returns.