When deflation occurs,
A) the nominal interest rate is equal to the real interest rate and inflation is positive.
B) the real interest rate is greater than the nominal interest rate.
C) the nominal interest rate is equal to the real interest rate and inflation is negative.
D) the nominal interest rate is greater than the real interest rate.
B
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The interest rate on a consol equals the
A) price times the coupon payment. B) price divided by the coupon payment. C) coupon payment plus the price. D) coupon payment divided by the price.
If a bond offers $400 in interest payments at the end of each of next 3 years and a repayment of $2,000 also at the end of the 3 years and the current discount rate is 5 percent, what is the market price for the bond?
A) $2,593 B) $3,589 C) $2,256 D) $2,817
When a regulator allows a monopolist to set its price equal to long-run average cost, the regulator is practicing
A) marginal cost pricing. B) operating cost pricing. C) average cost pricing. D) optimal cost pricing.
Of the collection of supply and demand diagrams in Figure 2.2, which one(s) could show the result of an increase in income?
A. Figure 1 B. Figure 2 C. Figure 3 D. Figures 1 and 2