If the Nominal Interest Rate Is 2 Percent and the Rate

question 176

Multiple Choice

If the nominal interest rate is 2 percent and the rate of inflation is 6 percent, what is the real interest rate?

• A) -8 percent
• B) -4 percent
• C) 4 percent
• D) 8 percent

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Definitions:

Compliance

The act of conforming to a request or demand, often from a figure of authority.

Compliance Tactics

Strategies used to persuade or influence others to agree with or obey a request or command.

Free Samples

Small quantities of a product given at no charge, allowing consumers to try before making a purchase decision.

Reciprocity Norm

A social norm suggesting that people should return the help they have received from others, creating a cycle of mutual assistance.