The nominal interest rate cannot fall below

Monopoly profits cannot persist in the long run, because there are barriers to entry

a. True b. False Indicate whether the statement is true or false

If the Fed's monetary policy reaction function does not change, then when inflation decreases the Fed responds by ________ the real interest rate, which ________ consumption and investment spending, which ________ output.

A. decreasing; increases; increases B. decreasing; decreases; decreases C. increasing; decreases; decreases D. increasing; increases; decreases