The Nominal Rate of Interest Tends to Rise During Time

question 219

Multiple Choice

The nominal rate of interest tends to rise during time of inflation because

• A)lenders require a higher rate in order to loan out money.
• B)borrowers are willing to pay a higher rate to obtain loans.
• C)loans are taken in "cheap" dollars but paid back in dollars of greater purchasing power.
• D)lenders require a higher rate in order to loan out money AND borrowers are willing to pay a higher rate to obtain loans.

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Definitions:

Freud

Sigmund Freud, an Austrian neurologist, established psychoanalysis, a method of treating mental disorders through conversations between a patient and a psychoanalyst.

Romantic Relationship

An intimate relationship between two people typically involving emotional and physical closeness, love, and affection.

Unscientific

A term used to describe methodologies, claims, or practices not based on or consistent with the principles of the scientific method.

Sexual Energy

A term often used to describe the force or drive behind sexual actions and desires, considered a powerful aspect of human physiology and psychology.