We should expect a country that experiences volatile inflation to also have:
A)Volatile nominal interest rates
B)Volatile real interest rates but stable nominal rates
C)Stable nominal interest rates
D)Volatile real interest rates

Question

Quizplus · Accepted Answer

Inflation and nominal interest rates have a positive relationship, meaning that when inflation is high, nominal interest rates also tend to be high. As a result, a country experiencing volatile inflation will likely have volatile nominal interest rates.

We Should Expect a Country That Experiences Volatile Inflation to Also