In the aftermath of the Great Recession, several governments engineered a negative nominal interest rate.Using the formula that relates nominal interest and real interest, negative nominal rates could imply any of the following, except
A) negative inflation premium or negative real interest rates.
B) zero inflation premium and negative real interest rates.
C) zero inflation premium and high positive real interest rates.
D) low inflation premium and a significantly negative real interest.
Correct Answer:
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