2. The following table shows the nominal interest rate and the annual inflation rate (the GDP deflator) for Japan in the period 1996-2015: 1996-2000 2001-2005 2006-2010 2011-2015 Interest rate 1.5% 1.4 % 1.3% 1.2% Inflation -1.9% -0.9 % -0.5% 1.6% Japan's nominal interest rate and annual inflation from 1996 to 2015. Source: World Bank. Based on this information, which of the following statements is correct? (There may be more than one correct answer). A. The real interest rate in 1996-2000 was -0.4%. B. Japan's real interest rate steadily increased during this period. C. Japan's real interest rate changed from positive to negative during the period. D. The real interest rate fell faster than the nominal interest rate.
2. The following table shows the nominal interest rate and the annual inflation rate (the GDP deflator) for Japan in the period 1996-2015: 1996-2000 2001-2005 2006-2010 2011-2015 Interest rate 1.5% 1.4 % 1.3% 1.2% Inflation -1.9% -0.9 % -0.5% 1.6% Japan's nominal interest rate and annual inflation from 1996 to 2015. Source: World Bank. Based on this information, which of the following statements is correct? (There may be more than one correct answer). A. The real interest rate in 1996-2000 was -0.4%. B. Japan's real interest rate steadily increased during this period. C. Japan's real interest rate changed from positive to negative during the period. D. The real interest rate fell faster than the nominal interest rate.
Chapter7: Unemployment And Inflation
Section: Chapter Questions
Problem 3.7P
Question
Only select the correct option from the list provided. there may be ore than one correct answer.

Transcribed Image Text:2. The following table shows the nominal interest rate and the annual inflation rate
(the GDP deflator) for Japan in the period 1996-2015:
1996-2000
2001-2005
2006-2010
2011-2015
Interest rate
1.5%
1.4 %
1.3%
1.2%
Inflation
-1.9%
-0.9 %
-0.5%
1.6%
Japan's nominal interest rate and annual inflation from 1996 to 2015. Source: World Bank.
Based on this information, which of the following statements is correct? (There may
be more than one correct answer).
A. The real interest rate in 1996-2000 was -0.4%.
B. Japan's real interest rate steadily increased during this period.
C. Japan's real interest rate changed from positive to negative during the
period.
D. The real interest rate fell faster than the nominal interest rate.
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