If the Price Level Increases by 80% in One Year

question 59

Multiple Choice

If the price level increases by 80% in one year, then for the real rate of interest to be 10%, the nominal rate of interest would have to be

• A)98%.
• B)70%.
• C)18%.
• D)88%.
• E)72%.

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Definitions:

Anticompetitive Price Discrimination

Pricing strategies by firms that unreasonably differentiate prices among customers or regions to eliminate competition or create a monopoly.

Price Discrimination

The strategy of selling the same product or service at different prices to different groups of consumers, based on their willingness to pay.

Clayton Act

A law enacted in 1914 to promote competition and prevent monopolies and unfair business practices in the United States.

Antitrust Laws

Laws designed to promote competition and prevent monopolies by regulating business practices that may restrain trade or lead to an unfair concentration of market power.