The Inflation Rate Has Been 4 Percent for Twenty Years

question 13

Multiple Choice

The inflation rate has been 4 percent for twenty years and the nominal interest rate has been 8 percent during this same time period.Unexpectedly,the actual inflation rate the next year is 8 percent.The real rate of interest this last year is

• A)zero.
• B)2 percent.
• C)4 percent.
• D)6 percent.

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Definitions:

Sociocultural Psychologists

Researchers who examine how social, cultural, and environmental contexts influence behavior and mental processes.

Metaphor

A figure of speech in which a word or phrase is applied to an object or action to which it is not literally applicable, suggesting a resemblance.

Culture

The social behavior and norms found in human societies, including knowledge, beliefs, arts, laws, customs, and habits.

Science

A systematic enterprise that builds and organizes knowledge in the form of testable explanations and predictions about the universe.