A Positive Relationship Between Nominal Interest Rates and Inflation in the United

question 19

Multiple Choice

A positive relationship between nominal interest rates and inflation in the United States is obvious in:

• A) both recent data and nineteenth-century data.
• B) recent data but not nineteenth-century data.
• C) nineteenth-century data but not recent data.
• D) neither nineteenth-century data nor recent data.

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Definitions:

Income Change

A variation in the amount of earnings received by a person, household, or economic entity over a period.

Inferior Good

A good for which an increase in income reduces the quantity demanded

Good A

A placeholder term typically used in economic models to represent a generic item or service in the market.

Income Falls

A situation where an individual's or group's earnings decrease over a period of time.