If the Inflation Rate Is 3 Percent and the Real

question 166

Multiple Choice

If the inflation rate is 3 percent and the real interest rate is 5 percent, then the nominal interest rate is:

• A) 4 percent.
• B) 10 percent.
• C) 2 percent.
• D) 8 percent.

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Definitions:

Oceanic Divergent Boundaries

Boundaries between tectonic plates that are moving away from each other, often resulting in the formation of new oceanic crust through volcanic activity.

Conveyor-belt Manner

A way of describing the movement and recycling of materials, often used in the context of plate tectonics and ocean currents.

Asthenosphere

A region of the Earth's upper mantle that lies just below the lithosphere and is involved in plate tectonic movements due to its plasticity.

Mid-ocean Ridges

Underwater mountain ranges formed by the upwelling of magma where tectonic plates are diverging, key sites of seafloor spreading.