Empirical evidence suggests that over the last several decades:
A) the nominal and real federal funds rates are related inversely.
B) the nominal and real federal funds rates are highly positively correlated.
C) while the FOMC has had a lot of influence over the nominal federal funds rate, they have been less successful at changing the real federal funds rate.
D) there is no correlation between the nominal and real federal funds.

Question

Quizplus · Accepted Answer

Empirical evidence shows that nominal and real federal funds rates tend to move together, indicating a positive correlation.

Empirical Evidence Suggests That Over the Last Several Decades