With expected inflation equal to zero in the model, investment activity for an economy is:
a. a positive function of the nominal rate of interest.
b. a negative function of the nominal rate of interest.
c. constant in the face of differing nominal rates of interest.
d. limited to the rate of growth of nominal GDP minus the inflation rate.
Ans: b. a negative function of the nominal rate of interest.
Economics
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The probability that an employed worker will lose his or her job in the next month is known as
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What impact do savings rates in Belgium have on the real interest rate that businesses in Belgium must pay to obtain the funds to finance their spending on plant and equipment?
What will be an ideal response?
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