The Equation for the Real Interest Rate Indicates That, Other

Multiple Choice

The equation for the real interest rate indicates that, other being things equal,

A) as inflation increases, the nominal interest rate will fall.
B) as inflation increases, the real interest rate will rise.
C) as inflation decreases, real income will fall.
D) as inflation changes, the real interest rate will not change.
E) as inflation decreases, the real interest rate will rise.