Which of the following statements is true ?
A)Demand-pull inflation is caused by excess total spending.
B)Cost-push inflation is caused by an increase in resource costs.
C)If nominal interest rates remain the same and the inflation rate falls, real interest rates increase.
D)If real interest rates are negative, lenders incur losses.
E)All of these.

Question

Quizplus · Accepted Answer

All the statements are true: Demand-pull inflation is due to excess spending, cost-push inflation results from increased resource costs, falling inflation with constant nominal rates raises real rates, and negative real rates mean lenders lose purchasing power.

Which of the Following Statements Is True