If the Nominal Interest Rate Is 7 Per Cent and the Inflation

question 54

Multiple Choice

If the nominal interest rate is 7 per cent and the inflation rate is 3 per cent, then the real interest rate is

• A) -4 per cent.
• B) 3 per cent.
• C) 4 per cent.
• D) 10 per cent.
• E) 21 per cent.

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