20 Which of the following is true about inflation and
interest rates?
(A) The higher the inflation rate, the higher the
real interest rate.
(B) If there is no actual or expected inflation, the
nominal and real interest rates are equal.
(C) If the economy is experiencing deflation, the
nominal interest rate exceeds the real
interest rate.
) The higher the inflation rate, the lower the
nominal interest rate.
(E) The nominal interest rate is the difference
between the real interest rate and the
expected inflation rate.