The Following Figure Shows the Inflation Rate and Ten-Year Bond

question 51

Multiple Choice

The following figure shows the inflation rate and ten-year bond yield. Refer to this figure when answering
Figure 14.4: Inflation and 10-Year Bond Yields
-Consider Figure 14.4 above. For most of 2008 the:

• A) real interest rate was negative
• B) 10-year-bonds' nominal interest rate was less than the real interest rate
• C) real interest rate was zero
• D) real interest rate was positive
• E) None of these answers are correct.

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