The Relationship Between Nominal Rates,real Rates,and Inflation Is Known as The

question 34

Multiple Choice

The relationship between nominal rates,real rates,and inflation is known as the:

• A)Miller and Modigliani theorem.
• B)Fisher effect.
• C)Gordon growth model.
• D)term structure of interest rates.
• E)interest rate risk premium.

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Definitions:

Price Floor

A government-imposed minimum price charged on goods and services, set above the equilibrium price to prevent market prices from falling too low.

Consumer Surplus

The discrepancy between consumer willingness to pay a total amount for a product or service and the amount they really do pay.

Consumer Surplus

The difference in the total amount consumers are predisposed and financially prepared to pay for a good or service versus their actual expenses.

Normal Good

A good for which demand increases as consumer income rises, and decreases when consumer income falls, all other factors being constant.