If the Inflation Rate Is Smaller Than the Nominal Interest

question 169

Multiple Choice

If the inflation rate is smaller than the nominal interest rate, the real interest rate is

• A) positive.
• B) negative.
• C) zero.
• D) either positive or zero.

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Definitions:

Inferential Statistics

A branch of statistics focused on drawing conclusions about populations based on samples.

Power

In statistics, the probability that a test will correctly reject a false null hypothesis; essentially, the test's sensitivity to detect an effect when there is one.

Likelihood Of Error

The probability or chance that a statistical conclusion may be incorrect or misleading.

Mean

An average of a set of numbers, calculated by dividing the sum of all the values by the number of values.