Inflation reached its peak (of at least 14 percent) in the late 1970s to the early 1980s.If this statement is true,then
A) it is certain the real rate of interest was greater than the nominal rate.
B) it is certain the nominal rate of interest was greater than the real rate.
C) borrowers would borrow more because,automatically,real rates would fall.
D) the real rate of interest must have been constant,even if the nominal rate varied because of consumption smoothing.
E) if higher nominal rates were charged,it would be certain that higher real rates would be received.
Correct Answer:
Verified
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