Examveda
Examveda

Nominal interest rates and nominal cash flows are usually reflected the

A. inflation effects

B. opportunity effects

C. equity effects

D. debt effects

Answer: Option A

Solution(By Examveda Team)

Nominal interest rates and nominal cash flows are usually reflected the inflation effects. Inflation has the following effects on production activities: Inflation may or may not result in an increase in production. As long as the economy does not reach the full employment stage, inflation has a favorable effect on production. Usually, as the price level increases, profits increase too.

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