Assume Deflation Is Occurring in a Nation; the Implication(s)

question 148

Multiple Choice

Assume deflation is occurring in a nation; the implication(s)

• A) are that both real and nominal interest rates are positive.
• B) are that both real and nominal interest rates are negative.
• C) is that the nominal interest rate exceeds the real interest rate.
• D) is that the real rate of interest exceeds the nominal rate of interest.
• E) is that time preferences in the nation have fallen.

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Definitions:

Implicit Encoding

Implicit encoding is the process of storing information without conscious awareness, typically involving memories of skills and habits.

Consciously Created

Products, ideas, or situations that are made or brought about through deliberate and purposeful thought and action.

Interactive Imagery

A mental technique involving the active creation and manipulation of visual images in the mind to aid in learning or problem-solving.

Effective

Relating to the ability to successfully achieve a desired or intended result.