If the Nominal Interest Rate Per Year Is 10% and the Inflation

question 24

Multiple Choice

If the nominal interest rate per year is 10% and the inflation rate is 4%, what is the real rate of interest?

• A) 10%
• B) 4%
• C) 5.8%
• D) None of the above

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Definitions:

Complete Metamorphosis

A type of insect development that includes four distinct life stages: egg, larva, pupa, and adult, with each stage looking entirely different and serving a different role in the life cycle.

Alternation of Generations

A reproductive cycle found in plants and some algae, involving both asexual and sexual phases.

Haploid

Having a single set of unpaired chromosomes, a condition typical of gametes in sexually reproducing organisms.

Diploid

Referring to a cell or organism that has two sets of chromosomes, one set inherited from each parent.