An Approximation to the "Real" Interest Rate Can Be Calculated

question 12

Multiple Choice

An approximation to the "real" interest rate can be calculated by

• A) subtracting the nominal interest rate from the inflation rate.
• B) subtracting the price level from the nominal interest rate.
• C) dividing the nominal interest rate by the inflation rate.
• D) subtracting the inflation rate from the nominal interest rate.

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Definitions:

Multiply

To increase or combine quantities by a specific factor or number, resulting in a total that is the product of the factors.

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