Because inflation tends to change relatively ________,action by the Bank of Canada to change the ________ interest rate causes the ________ interest rate to change by about the same amount.
A) quickly;nominal;real
B) quickly;real;nominal
C) slowly;nominal;real
D) slowly;real;nominal
E) slowly;prime business;overnight

Question

Quizplus · Accepted Answer

Inflation tends to change slowly, so when the Bank of Canada changes the nominal interest rate, the real interest rate changes by about the same amount because the inflation rate remains relatively stable in the short term.

Because Inflation Tends to Change Relatively ________,Action by the Bank