Suppose That, Initially, the Nominal Interest Rate Is 6 Percent

question 196

Multiple Choice

Suppose that, initially, the nominal interest rate is 6 percent and the inflation rate is 3 percent. If the inflation rate increases to 6 percent, what will be the new nominal interest rate?

• A) 6 percent
• B) 11 percent
• C) 1 percent
• D) 9 percent

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Definitions:

UCC

Refers to the Uniform Commercial Code, a comprehensive set of laws governing all commercial transactions in the United States.

Common Law

A body of law derived from judicial decisions, rather than from statutes or constitutions.

UCITA

The Uniform Computer Information Transactions Act, a proposed state law intended to standardize the law regarding the licensing of software and information.

Virginia

Virginia is a state in the Southeastern and Mid-Atlantic regions of the United States, known for its significant historical landmarks and diverse geography.