If an economy experiences deflation, the real interest rate
A) will be greater than the nominal interest rate.
B) will be equal to the deflation rate, so long as the nominal interest rate is positive.
C) will be negative when the nominal interest rate is positive.
D) will be less than the nominal interest rate.
Question 2
Under the monetary growth rule proposed by the monetarists, the money supply would grow each year at a constant rate equal to the long-run rate of growth of
A) employment. B) inflation. C) interest rates. D) real GDP.
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