During periods of deflation, the real interest rate will be lower than the nominal interest rate
a. True
b. False
Indicate whether the statement is true or false
False
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When a professor announces to the class that she will grade on a curve and that no one in the class will receive a grade lower than a "C"
A. a moral hazard problem for her students will likely arise. B. an adverse selection problem for her students will likely arise. C. the marginal social benefit will exceed the marginal social cost. D. the marginal social cost will exceed the marginal social benefit.
Between 1866 and 1914, statistical evidence suggests that many big businesses depended heavily on U.S. protectionist policies
Indicate whether the statement is true or false
The assumptions needed for the Coase theorem to work:
A. are often observed in the real world. B. often do not hold true in the real world. C. never hold true in the real world. D. always hold true in the real world.
Assume that the central bank increases the reserve requirement. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and GDP Price Index in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises, and GDP Price Index rises. b. The real risk-free interest rate falls, and GDP Price Index falls. c. The real risk-free interest rate rises, and GDP Price Index falls. d. The real risk-free interest rate and GDP Price Index remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.