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Which of the Following Statements Is Correct? the Real Interest

Question 96

Multiple Choice

Which of the following statements is correct? The real interest rate must be


A) high if the nominal interest rate is high.
B) high if the inflation rate is greater than the nominal interest rate.
C) low if the nominal interest rate is high.
D) positive if the nominal rate of interest is greater than the rate of inflation.
E) negative if the nominal rate of interest is greater than the rate of inflation.

Correct Answer:

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