If Your Nominal Rate of Return Is 8

question 64

Multiple Choice

If your nominal rate of return is 8.68 percent and your real rate of return is 2.05 percent, what is the inflation rate?

• A)5.32 percent
• B)6.50 percent
• C)6.29 percent
• D)6.63 percent
• E)16.77 percent

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Definitions:

Price Ceiling

A legally imposed limit on how high a price can be charged for a product, service, or commodity.

Equilibrium

A state in which market supply and demand balance each other, and as a result, prices become stable.

Quantity Demanded

The total amount of a good or service that consumers are willing to buy at a given price over a specified period.

Marginal Tax Rates

The rate at which an additional dollar of income is taxed, showing the percentage of tax applied to your income for each tax bracket you pass through.