When the Real Interest Rate Is Less Than Zero, Then

question 19

Multiple Choice

When the real interest rate is less than zero, then:

• A)a creditor will gain purchasing power.
• B)a creditor will just break even on his or her real loan return.
• C)a creditor will lose purchasing power.
• D)a creditor will benefit from inflation.
• E)a creditor's purchasing power will not be affected, because the nominal interest rate is greater than zero.

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