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If the Nominal Interest Rate Is Less Than the Real

Question 1

Multiple Choice

If the nominal interest rate is less than the real interest rate,we know that


A) both the nominal or real interest rate must be negative.
B) the nominal interest rate must be equal to expected inflation.
C) expected deflation must be occurring.
D) expected inflation must be positive.
E) expected inflation must be zero.

Correct Answer:

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