If the Annual Real Rate of Interest Is 3

question 22

Multiple Choice

If the annual real rate of interest is 3.5%, and the expected inflation rate is 3.5%, the nominal rate of interest would be approximately

• A) 0%.
• B) 3.5%.
• C) 12.25%.
• D) 7%.

---

Definitions:

Transnational Corporations

Large companies that operate in several countries around the world, often having a significant impact on global trade, economy, and politics.

Poor Countries

Nations with low levels of economic productivity, low standards of living, and often lacking in the basic infrastructure and services necessary for a high quality of life.

Benefits

Forms of compensation provided to employees or members of a community, which may include health insurance, pensions, grants, or access to services and facilities.

International Monetary Fund

An international financial institution created in 1945 to promote global monetary cooperation, secure financial stability, facilitate international trade, and reduce poverty worldwide.