If the Inflation Rate Is 13 Percent and the Nominal

question 137

Multiple Choice

If the inflation rate is 13 percent and the nominal interest rate is 12 percent, then the

• A) real interest rate is approximately 0 percent.
• B) nominal interest rate adjusted for inflation is approximately is 25 percent.
• C) real interest rate is approximately 1 percent.
• D) real interest rate is approximately - 1 percent.

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Definitions:

Favourable Attitude

A positive orientation or liking towards something, characterized by approval or support.

Relative Value

The worth or importance of something in relation to another item's worth, often used in economics and investing.

Source Factors

Characteristics of the communicator or source of information that affect the persuasiveness or effectiveness of the communication.

Mechanic

A skilled worker who repairs and maintains machinery, vehicles, or other mechanical equipment.