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:

Felt Conflict

The personal perception or experience of being in conflict, which can differ from the actual existence of a conflict situation.

Discomfort

A feeling of unease or mild pain, often a signal that something may need attention or change.

Motivates

Acts or factors that stimulate enthusiasm and energy in someone to do something.

Destructive Substantive Conflict

Disagreements over tasks, resources, or goals in an organization that lead to negative outcomes or hinder organizational performance.