If the Nominal Interest Rate Is 2 Percent and the Inflation

question 37

Multiple Choice

If the nominal interest rate is 2 percent and the inflation rate is 4 percent, then the real rate of interest is

• A) -2 percent.
• B) 2 percent.
• C) 3 percent.
• D) 6 percent.

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Definitions:

Grapevine Information

Informal communication that spreads quickly and is not officially sanctioned by organizational leadership.

Bond Of Trust

A foundational relationship built on reliability, integrity, and confidence between individuals or within a group.

Gossip

Informal or idle talk about others, typically involving details that are not confirmed as being true.

Grapevine

An informal communication channel within an organization, where information is spread through personal contacts and conversations rather than through official means.