Suppose That a Change in the Expected Inflation Rate Leads

question 29

Multiple Choice

Suppose that a change in the expected inflation rate leads supply and demand to adjust so that the after-tax expected real interest rate is unchanged at 2.0 percent.The tax rate is 30 percent.Initially, the expected inflation rate is 3.0 percent.If the expected inflation rate rises from 3 percent to 6 percent, the expected real interest rate

• A)rises by 0.75 percent.
• B)rises by 1.25 percent.
• C)falls by 1.25 percent.
• D)falls by 0.75 percent.

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Definitions:

High in Extraversion

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Conscientiousness Dimension

One of the five major personality traits, describing individuals who are reliable, well-organized, self-disciplined, careful, and responsible.

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