With 6 Percent Inflation and a 1 Percent Nominal Interest

question 102

Multiple Choice

With 6 percent inflation and a 1 percent nominal interest rate, the real interest rate is:

• A)7 percent.
• B)1 percent.
• C)−5 percent.
• D)5 percent.

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Definitions:

Flanders

A region located in parts of Belgium, France, and the Netherlands, known for its historic cities, Flemish art, and as a battleground during both World Wars.

Dutch Culture

The customs, arts, social institutions, and achievements of the Netherlands and its people.

French Culture

The arts, customs, languages, and social behaviors of the French people that have developed over centuries.

Glorious Revolution

The bloodless coup in England in 1688 that resulted in the overthrow of King James II and the ascension of William III and Mary II to the throne, significantly expanding the powers of Parliament.