Which of the following statements is true?
A) Demand-pull inflation is caused by an increase in the cost of production.
B) Cost-push inflation is caused by an increase in spending.
C) If nominal interest rates remain the same and the inflation rate falls, real interest rates decrease.
D) If real interest rates are positive, borrowers incur losses.

Question

Quizplus · Accepted Answer

If real interest rates are positive, it means the nominal interest rate is higher than the inflation rate, which can lead to higher costs for borrowers compared to the value of money they repay.

Which of the Following Statements Is True