Question
If a country had deflation of 2 percent while the nominalinterest rate increased by 1 percentage point, how would the realinterest rate change? a. The
If a country had deflation of 2 percent while the nominalinterest rate increased by 1 percentage point, how would the realinterest rate change?
a. The real interest rate would increase by 1 percentagepoint.
b. The real interest rate would increase by 3 percentagepoints.
c. The real interest rate would decrease by 3 percentagepoints.
d. The real interest rate would decrease by 1 percentagepoint.
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Economics of Money, Banking and Financial Markets
Authors: Frederic S. Mishkin
9th Edition
978-0321607751, 9780321599797, 321607759, 0321599799, 978-0321598905
