In periods of high inflation,_____.

A) people want to hold as much money as possible
B) the purchasing power of money decreases
C) the real interest rate exceeds the nominal interest rate
D) the nominal interest rates are likely to be low
E) the nominal interest rate equals the real interest rate

High Inflation

A period during which prices for goods and services rise excessively, eroding purchasing power.

Purchasing Power

The ability of an individual or group to buy goods and services, often considered in terms of the amount of goods and services that one unit of currency can buy.

Real Interest Rate

Adjusted interest rate for inflation, reflecting the true cost of borrowing or the real yield on savings.