Which One of the Following Is True

question 75

Multiple Choice

Which one of the following is true?

• A) The nominal rate of interest is the real rate plus the anticipated rate of inflation.
• B) The real rate of interest is the nominal rate plus the anticipated rate of inflation.
• C) Increases in anticipated inflation increase the real interest rate.
• D) Increases in the CPI increase the real interest rate.

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Definitions:

Coincidence

A situation in which events happen at the same time in a way that is not planned or expected.

Correlation

A statistical measure that indicates the extent to which two or more variables fluctuate together.

Restaurant

A business that prepares and sells food and drinks to customers.