a. move in opposite directions
b. are not related
c. move in the same direction
d. are such that the nominal rate is one-half the anticipated rate
2006-11-01 14:37:57 · 3 answers · asked by jessiebabie824 2 in Social Science ➔ Economics
i = r + pe,
where i is the nominal interest rate, r is the real interest rate and p (superscript) e is anticipated inflation. In practice, the real interest rate is fairly stable over time, so that pe and i typically move in the same direction.
Therefore, the answer is C.
2006-11-01 18:17:05 · answer #1 · answered by eco101 3 · 0⤊ 0⤋
In theory the nominal interest rate asked by buyers of bonds is the rate of real return on capital + the anticipated inflation rate over the lifetime of the bond. So the answer is C
2006-11-02 00:02:23 · answer #2 · answered by meg 7 · 0⤊ 0⤋
sophisticated problem. research at bing and yahoo. that will will help!
2014-11-06 04:17:14 · answer #3 · answered by Anonymous · 0⤊ 0⤋