Multiple Choice
If the real interest rate is 5%,the rate of inflation in the United States is 6%,and the rate of inflation in the United Kingdom is 3%,which of the following statements would NOT be true?
A) The nominal rate of interest in the U.S. would be greater than the nominal interest rate in the U.K.
B) The difference between the U.K. and U.S. interest rates is a function of the difference between their inflation rates.
C) The nominal rate of interest in the United States and the United Kingdom would be the same because of purchasing power parity.
D) Investors would get a higher return on their money in the United States.
Correct Answer:

Verified
Correct Answer:
Verified
Q14: The Big Mac Index perfectly explains the
Q21: Thomas is planning a vacation to Country
Q31: What is a black market? Under what
Q37: Which of the following has the greatest
Q38: El Salvador's hard peg exchange rate arrangement
Q40: Which of the following states that the
Q41: Which EU country has NOT adopted the
Q69: According to purchasing power parity, if the
Q78: Purchasing power parity (PPP)is a well-known theory
Q79: In a short essay, compare the roles