If the Nominal Interest Rate Is Greater Than the Real

question 72

Multiple Choice

If the nominal interest rate is greater than the real interest rate,

• A)it is an indication of economic growth.
• B)inflation must be occurring.
• C)lenders must lose because they can only make loans using the real interest rate.
• D)the real interest rate must be negative.
• E)None of the above answers is correct because it is not possible for the nominal interest rate to exceed the real interest rate.

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Definitions:

ANOVA F Statistic

A statistic used in Analysis of Variance (ANOVA) tests to determine if there are significant differences between the means of three or more groups.

Significance Level

A threshold chosen by the researcher which the p-value must be below in order to reject the null hypothesis.

Explanatory Variables

Variables in a statistical model that are used to predict or explain changes in the dependent variable.

Deaths

The occurrence of the permanent cessation of all vital functions in a living organism, marking the end of life.