If the Real Interest Rate Is Negative, It Must Mean

question 104

Multiple Choice

If the real interest rate is negative, it must mean that:

• A) in the short run, bond rates can be very volatile.
• B) in the short run, the real interest rate equals the marginal product of capital.
• C) in the short run, the real interest rate can deviate from the marginal product of capital.
• D) it is difficult to predict long-term interest rates.
• E) there is no relationship between long- and short-term interest rates.

---

Definitions:

Wage Rate

The fixed amount of compensation or payment received by an employee for employment services, typically expressed per hour or year.

Intense Heat

Extremely high temperatures that can impact environments, health, and activities.

Millionaires

Individuals whose net worth or wealth equals or exceeds one million units of currency.

College Degrees

Formal certifications provided by colleges or universities indicating the completion of a specific program of study.