If the Real Interest Rate Is Negative, It Must Mean

question 104

Multiple Choice

If the real interest rate is negative, it must mean that:

• A) in the short run, bond rates can be very volatile.
• B) in the short run, the real interest rate equals the marginal product of capital.
• C) in the short run, the real interest rate can deviate from the marginal product of capital.
• D) it is difficult to predict long-term interest rates.
• E) there is no relationship between long- and short-term interest rates.

---

Definitions:

Self-control

The ability to regulate one's emotions, thoughts, and behavior in the face of temptations and impulses.

Infant Baptism

A Christian sacrament involving the baptism of a young child, symbolizing their initiation into the faith community.

Christian Faith

A monotheistic religion based on the life and teachings of Jesus Christ, emphasizing love, redemption, and the relationship between God and humans.

Lutheran Background

A religious and cultural background stemming from the teachings and doctrines of Martin Luther, which initiated the Protestant Reformation.