Consider the following chart that depicts Interest Rates (in percentage): The chart shows the movement of nominal interest rates and real interest rates (defined as nominal interest rate minus inflation). Which one of the following is the correct interpretation ?
Options
(a)Nominal interest rates decreased at a constant rate in the period Feb. 1992 — Sept. 1993
(b)Inflation has constantly decreased from Feb. 1992 — Sept. 1993
(c)Although the nominal rates of interest have constantly declined from Feb. 1992—Sept. 1993, the real rates have been steadily increasing throughout the period
(d)Nominal rate of interest and real rate of interest are likely to become equal in 1994
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