How Is It Possible for Real Rates of Return to Increase

question 56

Multiple Choice

How is it possible for real rates of return to increase during times when the rate of inflation increases?

• A) Inflation increased more than the real return.
• B) Nominal returns actually decreased.
• C) Nominal returns increased more than inflation.
• D) Nominal returns increased less than inflation.

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Definitions:

Accommodation

Piagetian concept of adjusting schemes to fit new information and experiences.

Assimilation

Piagetian concept of the incorporation of new information into existing knowledge.

Equilibrium

A state of balance or stability within a system, achieved when opposing forces or influences are equal.

Cognitive Development

The construction of thought processes, including remembering, problem solving, and decision-making, from childhood through adolescence to adulthood.