In the Late 1970s, Nominal Interest Rates Were High and Inflation

question 64

Multiple Choice

In the late 1970s, nominal interest rates were high and inflation rates were very high. As a result, what were real interest rates?

• A) very high
• B) moderately high
• C) low, and in some years they were negative
• D) low, but never negative

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Definitions:

Profit-Sharing Plans

A company program that gives employees a share in the profits of the company.

Residual Claimants

Individuals or entities entitled to a share of a company's profits after all obligations have been met.

Team Production

A production process in which employees work together under the supervision of the owner or the owner’s representative.

Contracting Out

The practice of hiring external organizations or individuals to perform services or create goods that were previously done in-house.