Author Question: When deflation occurs, A) the nominal interest rate is equal to the real interest rate and ... (Read 109 times)

craiczarry · **on:** Jun 29, 2018

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.