If Both the Real Interest Rate and the Nominal Interest

question 98

Multiple Choice

If both the real interest rate and the nominal interest rate are 3 percent, then the

• A)inflation premium is zero.
• B)real GDP must exceed the nominal GDP.
• C)nominal GDP must exceed the real GDP.
• D)inflation premium also is 3 percent.

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Definitions:

Crustal Material

Any geological materials that make up the crust of the Earth, encompassing rocks, minerals, and sediments.

Lithosphere

The lithosphere is the rigid, outer layer of the Earth, comprising the crust and the upper part of the mantle.

Elevation

The height of a location above a specific reference point, usually above sea level.

Deformation

The alteration of the shape or size of rocks due to stress or strain, including processes like folding, faulting, and shearing.