Multiple Choice
People expect an inflation rate of 5 percent and the real interest rate is positive. Then the nominal interest rate will be
A) 5 percent.
B) less than 5 percent.
C) more than 5 percent.
D) Without more information it is impossible to tell if the nominal interest rate will be more than, less than, or equal to 5 percent.
Correct Answer:
Verified
Correct Answer:
Verified
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