In Words, the Real Rate of Interest Is Approximately Equal

question 40

Multiple Choice

In words, the real rate of interest is approximately equal to

• A) the nominal rate minus the inflation rate.
• B) the inflation rate minus the nominal rate.
• C) the nominal rate times the inflation rate.
• D) the inflation rate divided by the nominal rate.
• E) the nominal rate plus the inflation rate.

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Definitions:

Wholesalers

Businesses that buy goods in bulk from manufacturers or distributors and sell them in smaller quantities to retailers or other businesses.

Merchandising Company

A business that purchases finished products and sells them to consumers without changing their form.

Inventory

Goods or materials a business holds for the purpose of resale or production.

State Sales Tax

A tax imposed by a state on sales of goods and services, typically calculated as a percentage of the sale price.