Multiple Choice
If expected inflation is constant and the nominal interest rate increased 3 percentage points,what would happen to the real interest rate?
A) It would increase 3 percentage points.
B) It would increase,but by fewer than 3 percentage points.
C) It would decrease,but by fewer than 3 percentage points.
D) It would decrease by 3 percentage points.
Correct Answer:
Verified
Correct Answer:
Verified
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