Multiple Choice
If expected inflation is constant and the nominal interest rate increased 5 percentage points, what would happen to the real interest rate?
A) It would increase 5 percentage points.
B) It would increase, but by less than 5 percentage points.
C) It would decrease, but by less than 5 percentage points.
D) It would decrease by 5 percentage points.
Correct Answer:
Verified
Correct Answer:
Verified
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