An Unexpected Change in the Nominal Interest Rate Will

question 41

Multiple Choice

An unexpected change in the nominal interest rate will:

• A)change the real interest rate by a smaller amount than the change in the nominal interest rate in the short run​
• B)change the real interest rate by a greater amount than change in the nominal interest rate in the short run.
• C)change the real interest rate by the same amount as the change in the nominal interest rate in the short run.
• D)change the real interest rate by a smaller amount than the change in the nominal interest rate in the long run.
• E)change the real interest rate by a greater amount than the change in the nominal interest rate in the long run.

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Definitions:

Isostatic Rebound

The rise of land masses after the removal of the weight of ice sheets or glaciers, a process of Earth’s crust returning to its equilibrium position over geological time scales.

West Antarctica

The portion of Antarctica that lies west of the Transantarctic Mountains, known for its ice sheets and dynamic glacial activity.

Global Sea Levels

Refers to the average height of the ocean's surface between the high and low tide, which has been rising due to climate change.

Isostatic Rebound

The rise of land masses that were depressed by the huge weight of ice sheets during the last glacial period, leading to adjustments in the Earth's crust.