For a given nominal interest rate, a reduction in expected inflation will cause
A) a reduction in the real interest rate.
B) an increase in the real interest rate.
C) an increase in investment.
D) an increase in money demand.
B
Economics
You might also like to view...
Income disparities alone prove the existence of racial discrimination in the labor market
Indicate whether the statement is true or false
Economics
In the short run, there are large and persistent deviations between actual exchange rates and exchange rates predicted using purchasing power parity because of:
a. Discretionary monetary policy. b. Discretionary fiscal policy. c. Widely different inflation rates in the two nations. d. Very different real GDP growth rates in the two nations. e. Many goods and services in the two nations' price indices are not traded internationally.
Economics