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Question 1. Question : (TCO 4) Which of the following factors influence the real rate of interest?
Investor’s positive time preference
The gold supply
Return on capital investments
Both a and c
Question 2. Question : (TCO 4) Negative realized real rates of interest are associated with periods where
inflation forecasts significantly underestimate inflation.
nominal interest rates were too high relative to actual inflation.
prior inflation forecasts overestimated inflation