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    Money Banking and Financial Markets Study Set 2
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    Exam 4: Future Value, Present Value, and Interest Rates
  5. Question
    As Inflation Increases, for Any Fixed Nominal Interest Rate, the Real
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As Inflation Increases, for Any Fixed Nominal Interest Rate, the Real

Question 107

Question 107

Multiple Choice

As inflation increases, for any fixed nominal interest rate, the real interest rate:


A) Also increases
B) Remains the same, that's why it is real
C) Decreases
D) Decreases by less than the increase in inflation

Correct Answer:

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