Which Statement Is False

question 101

Multiple Choice

Which statement is false?

• A) The prime rate is a nominal interest rate.
• B) The prime rate is not adjusted for inflation.
• C) The realized real interest rate adjusts the nominal interest rate to remove the effects of inflation.
• D) Real interest rate equals nominal interest rate divided by inflation rate.
• E) In the last half of 2009, the real interest rate was 0.25 percent, close to zero.

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Definitions:

Fairness

A concept that deals with equitable treatment and the distribution of resources in a just manner.

Anchoring

A cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered when making decisions.

Context

Context refers to the circumstances or conditions that surround a particular event, decision, or phenomenon, affecting its meaning or interpretation.

Utility Maximization

The process by which consumers allocate their income in a way that maximizes their overall satisfaction.