To obtain a given real rate of return, lenders must charge a ________ nominal interest rate in the face of increasing inflation.
A)deflated
B)higher
C)lower
D)constant

Name: To obtain a given real rate of return, lenders must charge a ________ nominal interest rate in the face of increasing inflation. A)deflated B)higher C)lower D)constant
Brand: Quizplus
Rating: 4.8 (47 reviews)

Question

Quizplus · Accepted Answer

This is the result of the "Fisher effect" which says that nominal interest rates in inflation rates move together.

To Obtain a Given Real Rate of Return, Lenders Must