Which of the following statements is correct?
A) If the inflation rate is steady at 5 percent, for example, the real and nominal interest rates will be equal.
B) An increase in the demand for goods now compared with goods in the future would cause the real interest rate to rise.
C) A "positive rate of time preference" means that an individual would rather save than consume.
D) During an extended inflationary period, the money (or nominal) interest rate will usually be lower than the real rate of interest.
Correct Answer:
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