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If expected inflation is constant and the nominal interest rate increased 5 percentage points, what would happen to the real interest rate? a. It would increase 5 percentage points. b. It would increase, but by fewer than 5 percentage points. c. It would decrease, but by fewer than 5 percentage points. d. It would decrease by 5 percentage points. Solution Option .

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- If expected inflation is constant and the nominal interest rate increased 5 percentage points, what would happen to the real interest rate? a. It would increase 5 percentage points. b. It would increase, but by fewer than 5 percentage points. c. It would decrease, but by fewer than 5 percentage points. d. It would decrease by 5 percentage points. a. It would increase 5 percentage points. b. It would increase, but by fewer than 5 percentage points. c. It would decrease, but by fewer than 5 percentage points. d. It would decrease by 5 percentage points. Solution Option

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