If the inflation rate is zero, the nominal interest rate is A) ...

[jayhills49]

If the inflation rate is zero, the nominal interest rate is
 
  A) greater than the real interest rate.
  B) positive and the real interest rate is negative.
  C) equal to the real interest rate.
  D) less than the real interest rate.
  E) equal to the inflation rate.

Question 2

Purchasing power parity determines the exchange rate in
 
  A) the short run.
  B) nations that do not allow their exchange rate to fluctuate.
  C) the long run.
  D) the long run and the short run.
  E) theory only, but not in reality.

[yasmin]

Answer to Question 1

C

Answer to Question 2

C