Question
For a given nominal interest rate, an unexpectedly low inflation rate ______ the real interest rate.
a. increases
b. decreases
c. has no impact on
d. may either increase or decrease
e. is subtracted from
a. increases
b. decreases
c. has no impact on
d. may either increase or decrease
e. is subtracted from
Answers
economyst
real interest rate is nominal rate less inflation. So... "raises"