Which of the Following Statements Is True

Multiple Choice

Which of the following statements is true?

A) The real interest rate matters more to borrowers than the nominal interest rate.
B) The nominal interest rate is equal to the real interest rate minus the expected inflation rate.
C) If there is expected deflation (expected decline in the price level) , instead of expected inflation, the nominal interest rate will be greater than the real interest rate.
D) The nominal interest rate is determined by the demand for credit and the supply of credit, or by the demand for loanable funds and the supply of loanable funds.
E) If there is expected deflation, the nominal interest rate will necessarily be negative.