If the Real Interest Rate Is 2 Percent and Inflation

question 80

Multiple Choice

If the real interest rate is 2 percent and inflation rate is 1 percent, what is the nominal interest rate?

• A)0 percent
• B)1 percent
• C)2 percent
• D)3 percent

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Definitions:

Historical Order

The sequence of transactions or events documented in past records, often used for analysis and forecasting.

Cost

The amount of money or resources expended to acquire an asset, achieve a goal, or maintain an operation.

Profitability

A measure of the efficiency of a company in generating profits from its operations, typically expressed as net income divided by revenue.

Management Accountants

Professionals who focus on financial reporting and analysis for internal use by business managers to make informed decisions.