Suppose that a country experiencing deflation decides to set the nominal interest at zero. We can then infer thatGroup of answer choicesreal interest rate is negativereal interest rate is positivereal interest rate can be greater or less than the nominal interest ratereal interest rate equals the nominal interest rate

During periods of deflation, the nominal interest rate will be​Group of answer choices​higher than the real interest rate.​lower than the real interest rate.​the same as the real interest rate.​possibly higher, lower, or the same as the real interest rate.  The answer depends on how much deflation there is in the economy.

Real and nominal interest rates

This question does not follow from 22 e) above.  This is an independent question. 22 f)  Suppose that the monetary authority sets the real interest rate using the rule:  r =  0.02 + 0.5 (π – π*), where π is the inflation rate and π* is the inflation target. Suppose that current inflation rate (π) is 6% (or 0.06) and the inflation target (π*) is 2% (or 0.02).   What is the nominal interest rate? Write your answer in _______ %.   For example, if 7%, just enter 7.

Suppose the inflation rate is 10% and the nominal interest rate on a ten year bond is 8%. The real interest rate on the ten year bond will be Group of answer choices decreasing negative zero positive increasing

Imagine a scenario where the expected inflation rate is 1.5%, but the actual inflation rate turns out to be 1%. If the nominal interest rate remains unchanged, which statement is correct? a. Borrowers will benefit, and lenders will lose. b. Both borrowers and lenders will benefit. c. The economy is experiencing a deflationary episode. d. The ex post real interest rate is half a percentage point higher than the ex ante real interest rate.