Business, 13.02.2020 01:29 musfirahkhurram

An unusual development in the wake of the 2007-2009 financial crisis was that nominal interest rates on some financial instruments turned negative. In which of the following examples would the nominal interest rate be negative? In each case explain your choice clearly.

a. The real interest rate is 2 percent and the expected inflation rate is 1 percent.

b. The real interest rate is zero and the expected inflation rate is 2 percent.

c. The real interest rate is 1 percent and the expected inflation rate is minus 2 percent.

d. The real interest rate is minus 2 percent and the expected inflation rate is 3 percent

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An unusual development in the wake of the 2007-2009 financial crisis was that nominal interest rates...