If the nominal interest rate is above its equilibrium value, then
A) the demand curve for money shifts rightward and the interest rate rises.
B) the demand curve for money shifts leftward and the interest rate falls.
C) people sell financial assets and the interest rate falls.
D) the supply curve of money shifts leftward and the interest rate rises.
E) people buy financial assets and the interest rate falls.
Question 2
The table above has information about the CPI, nominal wage rate, and nominal interest rate for the country of Syldavia for the years 2010 to 2012. The reference base year is 2011. The inflation rate in Syldavia from 2011 to 2012 was
A) 8.4 percent. B) 8.0 percent. C) 4.0 percent. D) 3.0 percent. E) 10.3 percent.
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