Considering the data on real and nominal interest rates for the U.S. from 1979 to 2012, which of the following statements is most accurate?
A) The real interest rate remains unchanged over time.
B) There have been times when the real interest rate has been negative.
C) Nominal interest rates higher in 2000 than they had been at any other point in time.
D) The inflation rate is always greater than the real interest rate.

Question

Quizplus · Accepted Answer

According to the data, there have been times when the nominal interest rate was lower than the inflation rate, resulting in a negative real interest rate. Option A is incorrect as there are fluctuations in the real interest rate over time, and option C is incorrect as the nominal interest rate was highest in 1981, not in 2000. Option D is also incorrect as there have been times when the inflation rate was lower than the real interest rate.

Considering the Data on Real and Nominal Interest Rates for the U.S