If the inflation rate is larger than the nominal interest rate, the real interest rate is
A. zero.
B. positive.
C. negative.
D. either positive or zero.
Answer: C
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When a consumer is consuming at a point where his or her budget line is not as steep as his or her indifference curve, then he or she should
A) consume more of the good that is measured on the horizontal axis. B) consume less of the good that is measured on the horizontal axis. C) not change his or her behavior. D) consume none of the good that is measured on the horizontal axis.
If the Fed wanted to decrease the money supply, one way to make an enormous impact would be to:
A. increase the reserve requirement, which would decrease the money multiplier. B. decrease the reserve requirement, which would decrease the money multiplier. C. increase the reserve requirement, which would increase the money multiplier. D. decrease the reserve requirement, which would increase the money multiplier.
If the maturity of a debt instrument is less than one year, the debt is called
A) short-term. B) intermediate-term. C) long-term. D) prima-term.
In the U.S., each additional year of schooling has historically raised a person's wage on average by about
a. 5 percent. In less developed countries the gap between the wages of educated and uneducated workers is smaller. b. 10 percent. In less developed countries the gap between the wages of educated and uneducated workers is smaller. c. 5 percent. In less developed countries the gap between the wages of educated and uneducated workers is larger. d. 10 percent. In less developed countries the gap between the wages of educated and uneducated workers is larger.