The Market Interest Rate in Alpha Is 7% and the Market

question 96

Multiple Choice

The market interest rate in Alpha is 7% and the market interest rate in Beta is 10%,but the inflation rate in Alpha is 3% and inflation rate in Beta is 8%.Which of the following statements is true?

• A) The real interest rate is higher in Alpha,but the nominal interest rate is higher in Beta.
• B) The real interest rate is lower in Alpha,but the nominal interest rate is lower in Beta.
• C) Both the real and nominal interest rates are higher in Alpha.
• D) Both the real and nominal interest rates are higher in Beta.
• E) The real and nominal interest rates are the same in Alpha and Beta.

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Definitions:

Sensitive

Being easily affected by external forces or stimuli; often refers to issues or subjects requiring careful handling.

Deft Touch

A deft touch refers to the skillful and subtle handling of a situation, often implying a gentle or nuanced approach.

Consequences

Outcomes or implications that result from an action or decision, affecting future events or behaviors.

Attitudes And Behaviors

The combination of mental and emotional dispositions toward something, and the actions that reflect those dispositions.