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

question 37

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.
• E)High interest rates mean that savings grow faster,and when people have more money to spend,prices will increase.

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Definitions:

Prognosis

A forecast or prediction about the likely outcome or course of a disease or condition based on current medical knowledge and the patient's health status.

Etiology

The study of the causes or origins of diseases or disorders, including factors contributing to the development of a condition.

Outcome

The result or effect of an action, situation, or event.

Prognosis

A prediction concerning the likely outcome or course of a disease, based on a patient's condition and the usual progression of the disease.