Which of the following statements about real interest rate is WRONG? Real interest is equal to nominal interest rate minus inflation. Real interest rate can be negative. Real interest rate affects saving and investment. Real interest rate must be positive.

Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations
Section: Chapter Questions
Problem 13P
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Which of the following statements about real interest rate is WRONG?
Real interest is equal to nominal interest rate minus inflation.
Real interest rate can be negative.
O Real interest rate affects saving and investment.
O Real interest rate must be positive.
Transcribed Image Text:Which of the following statements about real interest rate is WRONG? Real interest is equal to nominal interest rate minus inflation. Real interest rate can be negative. O Real interest rate affects saving and investment. O Real interest rate must be positive.
Which of the following statements is correct?
GDP deflator measures the growth in the prices of consumption goods and
services.
Only CPI can be used to measure inflation.
CPI measures the growth in the prices of consumption goods and services.
O Only GDP deflator can be used to measure inflation.
Transcribed Image Text:Which of the following statements is correct? GDP deflator measures the growth in the prices of consumption goods and services. Only CPI can be used to measure inflation. CPI measures the growth in the prices of consumption goods and services. O Only GDP deflator can be used to measure inflation.
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