In the Long Run the Real Interest Rate Is Determined

question 30

Multiple Choice

In the long run the real interest rate is determined by ________, and in the short-run the Federal Reserve can control the real interest rate by setting the nominal interest rate if inflation adjusts ________.

• A)saving and investment; slowly
• B)saving and investment; quickly
• C)the Federal Reserve; to equal the increase in the money supply
• D)the Federal Reserve; slowly

---

Definitions:

Land Improvements

Enhancements made to a parcel of land to increase its value, such as landscaping, fencing, and infrastructure development.

Revenue Expenditure

Expenditures that are immediately charged against revenues as an expense of the period in which they are incurred, often related to the costs of day-to-day operations.

Open Pickup Truck

A light-duty truck with an open cargo area in the rear, often used for transporting goods and materials.

Appraised Value

The estimated monetary value of an asset determined by a professional appraiser based on its features and market conditions.