Assuming the nominal interest rate is positive, ceteris paribus, which of the following statements is correct? a. If the nominal interest rate is 5 percent and the inflation rate is 2 percent, then the real interest rate is-3 percent. If the nominal interest rate is 4 percent and the inflation rate is 3 percent, then the real interest rate is 7 percent. O c. When the inflation rate is zero, ceteris paribus, the nominal interest rate will be less than the real interest rate. O d. When the inflation rate is positive, ceteris paribus, the real interest rate will be less than the nominal interest rate.
Assuming the nominal interest rate is positive, ceteris paribus, which of the following statements is correct? a. If the nominal interest rate is 5 percent and the inflation rate is 2 percent, then the real interest rate is-3 percent. If the nominal interest rate is 4 percent and the inflation rate is 3 percent, then the real interest rate is 7 percent. O c. When the inflation rate is zero, ceteris paribus, the nominal interest rate will be less than the real interest rate. O d. When the inflation rate is positive, ceteris paribus, the real interest rate will be less than the nominal interest rate.
Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations
Section: Chapter Questions
Problem 13P
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