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    Principles of Macroeconomics Study Set 8
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    Exam 17: Money Growth and Inflation: The Classical Theory of Inflation
  5. Question
    When Deflation Exists
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When Deflation Exists

Question 6

Question 6

Multiple Choice

When deflation exists,


A) the real interest rate is less than the nominal interest rate.
B) the real interest rate is greater than the nominal interest rate.
C) the real interest rate and inflation are less than the nominal interest rate.
D) prices rise.

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