For a Given Real Interest Rate,a Decrease in the Inflation

question 57

Multiple Choice

For a given real interest rate,a decrease in the inflation rate would

• A)decrease the after-tax real interest rate and so decrease saving.
• B)decrease the after-tax real interest rate and so increase saving.
• C)increase the after-tax real interest rate and so decrease saving.
• D)increase the after-tax real interest rate and so increase saving.

---

Definitions:

Foreign Exchange Loss

A loss that occurs when the value of a foreign currency declines in relation to the domestic currency, affecting transactions involving foreign currencies.

Merchandise

Goods that are bought and sold by businesses in the normal course of operations.

Foreign Exchange Loss

A decrease in domestic currency value resulting from transactions denominated in a foreign currency, often due to fluctuating exchange rates.

Ruble Receivable

An amount expected to be received denominated in Russian Rubles, typically from transactions or contracts.