By Marks buys a one-year German government bond (called a bund) for $400. He receives principal and interest totaling $436 one year later. During the year the CPI rose from 150 to 162, but he had thought the CPI would be at 159 by the end of the year. By Marks had expected the real interest rate to be ________, but it actually turned out to be ________.

An increase in the price of ice cream would cause a decrease in the demand for ice cream and an increase in the demand for frozen yogurt, a substitute

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

The real rate of interest is

a. interest paid by commercial banks. b. interest paid by the Fed. c. equal to the money rate of interest plus the inflationary premium. d. the money rate of interest adjusted for inflation.