If an Economy Experiences Deflation,the Real Interest Rate

question 114

Multiple Choice

If an economy experiences deflation,the real interest rate

• A)will be less than the nominal interest rate.
• B)will be negative when the nominal interest rate is positive.
• C)will be greater than the nominal interest rate.
• D)will be equal to the deflation rate,so long as the nominal interest rate is positive.

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Definitions:

Linear Perspective

A depth cue that allows us to perceive the depth and distance of objects by the way parallel lines seem to converge at a point in the distance.

Relative Size

A perceptual cue which allows the determination of distance based on the knowledge of the size of objects.

Gestalt Principles

A concept suggesting that the brain works in a holistic, parallel, and analog manner, characterized by its self-organizing features.

Continuity

The concept or state of uninterrupted flow or progression, often discussed in the context of developmental psychology and the gradual development of individuals over time.