Which of the Following Is True

question 163

Multiple Choice

Which of the following is true?

• A)The real interest rate is always positive.
• B)The nominal interest rate is usually negative.
• C)The real interest rate can be negative.
• D)The real interest rate can never be zero.
• E)The nominal interest rate is usually less than the real interest rate.

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Definitions:

Cash Outflow

Payments or expenditures of cash, representing the movement of cash out of a business for expenses, investments, or acquisitions.

Discount Rate

The interest rate used to discount future cash flows to their present value, often used in capital budgeting and investment planning.

Original Investment

The initial amount of money used to purchase an asset or start an investment.

Cash Inflows

Money received by a business from its operations, financing, or investing activities.