Real interest rates:
A) always exceed inflation rates.
B) can decline to zero but no lower.
C) can be negative, zero, or positive.
D) traditionally exceed nominal rates.

Question

Quizplus · Accepted Answer

Real interest rates can be negative when inflation exceeds the nominal interest rate. They can also be zero or positive depending on the inflation and nominal interest rate. Therefore, option C is the correct answer.

Real Interest Rates