If the Rate of Inflation Is Zero, Prices Are Expected

question 82

Multiple Choice

If the rate of inflation is zero, prices are expected to remain stable, and the nominal rate of interest is 5 percent, then the

• A) real rate of interest is equal to the nominal rate.
• B) real rate of interest is less than the nominal rate.
• C) nominal rate is greater than the real rate of interest.
• D) investment demand schedule will shift upward.

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Definitions:

Innate Categories

refer to the basic, naturally occurring classifications that the human mind is believed to automatically and instinctively recognize and sort information into.

Taste Buds

Sensory organs located on the tongue, allowing for the perception of different tastes such as sweet, sour, bitter, and salty.

Screening Service

A system or process designed to identify individuals who may have a particular disease, condition, or risk factor.

Dominant Sense

The most developed or most relied upon of the senses (sight, hearing, taste, touch, smell) in an individual.