If Inflation Is 8 Per Cent and the Real Interest

question 16

Multiple Choice

If inflation is 8 per cent and the real interest rate is 3 per cent, then the nominal interest rate must be

• A) 3/8 per cent.
• B) -5 per cent.
• C) 5 per cent.
• D) 11 per cent.
• E) 24 per cent.

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