Which of the following statements is correct?
A) For a given real interest rate, the nominal interest must decrease if expected inflation increases.
B) For a given nominal interest rate, the real interest will decrease if inflation decreases.
C) For a given expected inflation rate, the nominal interest must increase if real interest decreases.
D) For a given real interest rate, the nominal interest must increase if expected inflation increases.
Correct Answer:
Verified
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