If the Nominal Interest Rate Falls, and the Expected Inflation

Multiple Choice

If the nominal interest rate falls, and the expected inflation rate rises, we know that the real interest rate:

A) will decrease.
B) will decrease, but only if the decrease in the nominal rate is smaller than the increase in expected inflation.
C) cannot be defined.
D) will increase.
E) will increase, but only if the decrease in the nominal rate is greater than the increase in expected inflation.