If the Bank Returns $1,060 on the $1,000 Deposited for a Year

question 96

Multiple Choice

If the bank returns $1,060 on the $1,000 deposited for a year during which inflation was 4 percent,
The real interest rate is

• A)10 percent.
• B)2 percent.
• C)6 percent.
• D)-2 percent.
• E)16 percent.

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