When looking at a graph of nominal and real interest rates you notice the graph for nominal rates and the graph for real rates cross each other many times.From this you conclude
A)consumer prices sometimes rose and sometimes fell in the time frame represented on the graph.
B)consumer prices were always rising in the time frame represented on the graph.
C)the economy never experienced a recession in the time frame represented on the graph.
D)GDP was always increasing for the time frame represented on the graph.

Question

Quizplus · Accepted Answer

The crossing of nominal and real interest rates indicates that inflation fluctuated during the time frame represented on the graph. This suggests that consumer prices sometimes rose and sometimes fell.

When Looking at a Graph of Nominal and Real Interest