When deflation occurs, A) the nominal interest rate is equal ...

[craiczarry]

When deflation occurs,
 
  A) the nominal interest rate is equal to the real interest rate and inflation is positive.
  B) the real interest rate is greater than the nominal interest rate.
  C) the nominal interest rate is equal to the real interest rate and inflation is negative.
  D) the nominal interest rate is greater than the real interest rate.

Question 2

Refer to Figure 18-1. Italians cut back on smoking and cut their demand for American cigarettes in half. Assuming all else remains constant, this would be represented as a movement from
 
  A) B to A. B) A to D. C) D to C. D) B to C.

[l.stuut]

Answer to Question 1

B

Answer to Question 2

A

[craiczarry]

Great answer, keep it coming

[JaynaD87]

Gracias!