Historically,why Have High Inflation Rates Tended to Be Associated with High

question 81

Multiple Choice

Historically,why have high inflation rates tended to be associated with high nominal interest rates?

• A)Individuals will spend more when they expect their investments to increase in value.
• B)Growth in investment and savings is encouraged when consumers are judged to be overspending.
• C)High inflation leads to a decrease in purchasing power and thus increases the attractiveness of investment over consumption in the short term.
• D)The real interest rate needs to be high enough so that individuals can expect their savings to have greater purchasing power in the future than in the present.

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Definitions:

Undue Hardship

A significant difficulty or expense imposed on an employer by accommodating an employee under laws like the ADA.

Restraints on Competition

Measures or agreements that limit competition between businesses, often scrutinized under antitrust laws.

Free Competition

The condition in a market where businesses and individuals can operate and compete with minimal governmental interference or regulation.

Public Interest

The welfare or well-being of the general public, often considered in the formulation of laws and governmental policies.