Answered You can hire a professional tutor to get the answer.

QUESTION

When a financial instrument carries a fixed nominal interest rate, what happens to the real interest rate when deflation occurs?

When a financial instrument carries a fixed nominal interest rate, what happens to the real interest rate when deflation occurs?

Solution:Deflation is just opposite to inflation. In deflation price of all things will go down. Deflation occurs wheninflation falls to negative. When deflation occurs ideally real interest...
Show more
LEARN MORE EFFECTIVELY AND GET BETTER GRADES!
Ask a Question