If Expected Inflation Is Constant and the Nominal Interest Rate

question 18

Multiple Choice

If expected inflation is constant and the nominal interest rate decreases by 2 percentage points,then the real interest rate

• A)increases by 2 percentage points.
• B)increases,but by less than 2 percentage points.
• C)decreases,but by less than 2 percentage points.
• D)decreases by 2 percentage points.

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