If the Annual Real Rate of Interest Is 2

question 55

Multiple Choice

If the annual real rate of interest is 2.5%, and the expected inflation rate is 3.4%, the nominal rate of interest would be approximately

• A) 5.9%.
• B) 0.9%.
• C) -0.9%.
• D) 7%.
• E) None of the options are correct.

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Definitions:

Open-Ended Questions

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