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If the Inflation Rate Is Zero, Then

Question 361

Multiple Choice

If the inflation rate is zero, then


A) both the nominal interest rate and the real interest rate can fall below zero.
B) the nominal interest rate can fall below zero, but the real interest rate cannot fall below zero.
C) the real interest rate can fall below zero, but the nominal interest rate cannot fall below zero.
D) neither the nominal interest rate nor the real interest rate can fall below zero.

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