Which of the Following Statements Is Correct

question 220

Multiple Choice

Which of the following statements is correct?

• A)For a given real interest rate, the nominal interest must decrease if expected inflation increases.
• B)For a given nominal interest rate, the real interest will decrease if inflation decreases.
• C)For a given expected inflation rate, the nominal interest must increase if real interest decreases.
• D)For a given real interest rate, the nominal interest must increase if expected inflation increases.

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Definitions:

MP

Stands for "Member of Parliament," but in a logical context, it refers to a deductive pattern of reasoning where a specific conclusion is inferred from a general rule and a specific case.

Conj

An abbreviation for "Conjunction," a logical operator that connects two conditions or propositions where both must be true.

Inference Forms

Patterns of reasoning where specific statements lead logically to a conclusion.

MP

In logic, MP refers to Modus Ponens, a form of argument that if a conditional statement ('If P then Q') is accepted, and P is affirmed, then Q must also be affirmed.