The Higher You Think the Inflation Rate Is Likely to Be

question 146

Multiple Choice

The higher you think the inflation rate is likely to be,

• A)the higher the nominal interest rate you will offer as a borrower and want as a lender
• B)the higher the nominal interest rate you will offer as a borrower,and the lower the rate you will want as a lender
• C)the lower the nominal interest rate you will offer as a borrower and want as a lender
• D)the higher the real interest rate you will want as a lender
• E)the higher the real interest rate you will offer as a borrower

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Definitions:

Relative Prices

The price of one good or service compared to another, usually indicating how many units of one good you can exchange for a unit of another.

Quinces

A yellow fruit that is similar to a pear in shape and is often used in cooking or making preserves due to its tart flavor.

Kumquats

Small, edible fruit resembling oranges with a sweet rind and tart flesh, often eaten whole or used in culinary dishes.

Bushel

A unit of volume that is used for measuring quantities of agricultural produce, such as grains.