Which of the Following Best Describes Nominal Interest Rates and Real

question 162

Multiple Choice

Which of the following best describes nominal interest rates and real interest rates in the 1970s and 1990s?

• A)Nominal interest rates were high in the 1970s, and real interest rates were high in the 1990s.
• B)Nominal interest rates were high in the 1970s, and real interest rates were low in the 1990s.
• C)Nominal interest rates were high in the 1990s, and real interest rates were high in the 1970s.
• D)Nominal interest rates were high in the 1990s, and real interest rates were low in the 1970s.

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Definitions:

High-risk Securities

Financial instruments that offer a high potential return but also present a higher likelihood of loss.

Quick Resell

The act of selling an item or property soon after its purchase, typically to capitalize on market conditions or make a quick profit.

General Obligation Bond

A type of municipal bond backed by the credit and taxing power of the issuing jurisdiction rather than the revenue from a given project.

Bond Issue

The process by which a company or government raises capital by issuing debt securities, known as bonds, to investors.