When prices are rising, which of the following will be true?
A) The real interest rate will be lower than the nominal interest rate.
B) The real interest rate will be negative.
C) The real interest rate will be higher than the nominal interest rate.
D) The nominal interest rate will be negative.
E) The nominal interest rate will be lower the real interest rate.
Correct Answer:
Verified
Q240: Table 5.15 Q241: Imagine that you borrow $1,000 for one Q242: When deflation occurs, Q243: In 2016 the nominal interest rate paid Q244: The stated interest rate on a loan Q246: The CPI in 2014 was 125.2, while Q247: Suppose you borrow $1,000 at an interest Q248: During the 1990s,Japan experienced periods of deflation Q249: Suppose you lend $1,000 at an interest Q254: If inflationary expectations are increasing,we would expect
A)the real interest rate is
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