During the Great Depression,real interest rates
A)rose to unprecedentedly high levels.
B)rose only slightly above the long-run trend.
C)fell to unprecedentedly low levels.
D)fell only slightly below the long-run trend.

Question

Quizplus · Accepted Answer

During the Great Depression, deflation caused real interest rates to rise significantly, as nominal rates did not fall as quickly as prices, leading to high real interest rates.

During the Great Depression,real Interest Rates