If the Rate of Inflation Is Zero, Prices Are Expected

question 387

Multiple Choice

If the rate of inflation is zero, prices are expected to remain stable, and the nominal rate of interest is 3 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:

Allegiance

Allegiance is a strong loyalty or commitment to a person, group, cause, or country, often demonstrated through support or adherence.

Political Campaigns

Organized efforts aimed at influencing the decision-making process of a specific group, particularly in elections to secure votes for candidates or policies.

Major Corporations

Large businesses that operate in multiple countries, often with considerable influence on the market and global economy.

Capitalism

Capitalism is an economic system characterized by private ownership of the means of production, where goods and services are produced for profit in a market economy.