Business, 15.07.2019 00:00 caromaybelline71

The 1970s saw a period of high inflation in many industrialized countries including the united states. due to the increase in the rate of inflation, lenders, including credit card companies, revised their nominal interest rates upward. how is the rate of inflation related to the nominal interest rate that credit card companies charge, and why would lenders need to increase the nominal interest rate when the inflation rate increases? a. the nominal rate of interest is the real rate of interest plus the rate of inflation; lenders need to raise the nominal rate when inflation increases to stabilize credit market activity. b. the nominal rate of interest is the real rate of interest plus the rate of inflation; lenders need to raise the nominal rate when inflation increases to maintain their desired real return. c. the nominal rate of interest and the inflation rate are inversely related; lenders need to raise the nominal rate when inflation increases to satisfy government regulations on lending practices. d. the nominal rate of interest is the real rate of interest less the rate of inflation; lenders need to raise the nomin

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