If Expected Inflation Is Constant and the Nominal Interest Rate

question 60

Multiple Choice

If expected inflation is constant and the nominal interest rate increased 5 percentage points, what would happen to the real interest rate?

• A)It would increase 5 percentage points.
• B)It would increase, but by less than 5 percentage points.
• C)It would decrease, but by less than 5 percentage points.
• D)It would decrease by 5 percentage points.

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Definitions:

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Individual likes, dislikes, or choices based on one's tastes or opinions.

Hygienic Practices

Actions and behaviors aimed at maintaining cleanliness and promoting health to prevent disease spread, such as handwashing.

Bad Breath

An unpleasant odor emanating from the mouth, often caused by bacterial activity or certain foods.

Halitosis

A medical term for bad breath, often caused by poor dental hygiene, dietary choices, or health conditions.