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If the Nominal Interest Rate Is Greater Than the Real

Question 69

Multiple Choice

If the nominal interest rate is greater than the real interest rate,


A) the real interest rate must be negative.
B) lenders must lose because they can only make loans using the real interest rate.
C) it is an indication of economic growth.
D) inflation must be occurring.
E) None of the above answers is correct because it is not possible for the nominal interest rate to exceed the real interest rate.

Correct Answer:

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