In the Long Run, the Real Interest Rate Is 3

question 39

Multiple Choice

In the long run, the real interest rate is 3 percent, real GDP grows at 4 percent, velocity is constant, and the quantity of money grows at 8 percent. The nominal interest rate is

• A)12 percent.
• B)8 percent.
• C)6 percent.
• D)10 percent.
• E)7 percent.