If the real interest rate is 5%, the rate of inflation in the United States is 6%, and the rate of inflation in the United Kingdom is 3%, which of the following statements would NOT be true?

Group of answer choices

• The nominal rate of interest in the United States would be greater than the nominal interest rate in the United Kingdom.
• The difference between the U.K. and U.S. interest rates is a function of the difference between their inflation rates.
• The nominal rate of interest in the United States and the United Kingdom would be the same because of purchasing power parity.
• Investors would get a higher return on their money in the United States.

Answer rating: 100% (QA)

The nominal rate of interest in the United States and the United Kingdom would be the same because o... View the full answer