If Inflation Does Not Adjust Rapidly,then When the Bank of Canada

question 38

Multiple Choice

If inflation does not adjust rapidly,then when the Bank of Canada increases the nominal interest rate,the real interest rate in the short run will

• A) increase.
• B) decrease.
• C) not change.
• D) equal the nominal interest rate.
• E) be determined by saving and investment decisions.

---

Definitions:

Retail Inventory Method

An accounting procedure for estimating the final inventory balance of a retailer by using percentages of gross margins based on sales and the cost of goods sold.

Ending Inventory

The sum value of inventory available for purchase at the end of an economic period.

Beginning Inventory

The value of all the goods available for sale at the start of an accounting period; essentially the remaining inventory from the previous period.

Internal Controls

Procedures and mechanisms implemented by a company to ensure integrity in financial reporting, compliance with laws and regulations, and effective and efficient operations.