If the Expected Inflation Rate Is 4 Percent, the Nominal

question 31

Multiple Choice

If the expected inflation rate is 4 percent, the nominal interest rate is 6 percent, and the actual inflation rate turns out to be 2 percent, then the realized real interest rate is _____than the expected real interest rate and borrowers______relative to lenders.

• A)less; gain
• B)less; lose
• C)greater; gain
• D)greater; lose

---

Definitions:

Labeling Theory

Holds that deviance results not so much from the actions of the deviant as from the response of others, who label the rule breaker a deviant.

Deviance Results

Outcomes or consequences that stem from behaviors or actions that violate societal norms.

Non-Deviant Associations

Relationships or connections with groups or individuals that conform to societal norms and laws, avoiding behaviors considered deviant.

Differential Association Theory

Holds that people learn to value deviant or nondeviant lifestyles depending on whether their social environment leads them to associate more with deviants or nondeviants.