Multiple Choice
The market interest rate in Alpha is 7% and the market interest rate in Beta is 10%,but the inflation rate in Alpha is 3% and inflation rate in Beta is 8%.Which of the following statements is true?
A) The real interest rate is higher in Alpha,but the nominal interest rate is higher in Beta.
B) The real interest rate is lower in Alpha,but the nominal interest rate is lower in Beta.
C) Both the real and nominal interest rates are higher in Alpha.
D) Both the real and nominal interest rates are higher in Beta.
E) The real and nominal interest rates are the same in Alpha and Beta.
Correct Answer:
Verified
Correct Answer:
Verified
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