Unless Deflation Occurs, the Nominal Interest Rate Will Always Be

question 58

True/False

Unless deflation occurs, the nominal interest rate will always be greater than or equal to the real interest rate.

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Definitions:

Compliance

The act of conforming to or following rules, standards, or laws, or yielding to a request or command from an authority.

Low-Ball Technique

A strategy in which someone makes a very attractive initial offer to get a person to commit to an action and then makes the terms less favorable.

Norm of Reciprocity

A social expectation that people will respond to each other in kind—returning benefits for benefits provided and responding to actions with similar actions.

Door-In-The-Face Technique

A persuasive strategy involving making an unreasonably large request that is likely to be refused, followed by a smaller request that is actually the desired outcome.