In a country where prices never change, the nominal interest rate is equal to the ________.
A) real exchange rate
B) inflation rate
C) expected inflation rate
D) real interest rate

Question

Quizplus · Accepted Answer

In a country where prices never change, there is no inflation. Therefore, the nominal interest rate equals the real interest rate, as there is no need to adjust for inflation.

In a Country Where Prices Never Change, the Nominal Interest