Which of the Following Statements About Real and Nominal Interest

question 18

Multiple Choice

Which of the following statements about real and nominal interest rates is correct?

• A)When the nominal interest rate is rising,the real interest rate is necessarily rising;when the nominal interest rate is falling,the real interest rate is necessarily falling.
• B)If the nominal interest rate is 4 percent and the inflation rate is 3 percent,then the real interest rate is 7 percent.
• C)An increase in the real interest rate is necessarily accompanied by either an increase in the nominal interest rate,an increase in the inflation rate,or both.
• D)When the inflation rate is positive,the nominal interest rate is necessarily greater than the real interest rate.

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Definitions:

Flow

A mental state of deep focus and immersion in activities, where individuals lose a sense of time and self-awareness.

Intrinsic Motivation

The drive to engage in an activity for its own sake and personal rewards, rather than external pressures or rewards.

Extrinsic Motivation

Motivation driven by external rewards such as money, praise, or avoidance of punishment, rather than by intrinsic interest or enjoyment in the task itself.

Performance

The act of carrying out a task or function, often measured by its success or efficiency in achieving intended results.