Let the Price Level of a Given Economy Increase from 100

question 31

Multiple Choice

Let the price level of a given economy increase from 100 to 107.2 over the course of one year. If the nominal rate of interest were 7.2 percent over that period, then the real rate of interest would have been

• A) 0 percent.
• B) 5 percent.
• C) 7.2 percent.
• D) 12.2 percent.
• E) -2.2 percent.

---

Definitions:

Escape Poverty

The process of overcoming conditions of economic hardship to achieve a better standard of living.

Legal Drug Culture

A social framework that normalizes and regulates the use and distribution of drugs that are sanctioned by law.

Cognitive Association

Cognitive association involves the mental linkage between two concepts, objects, or ideas based on memory or reasoning.

Social Factors

Elements within a society that influence individuals' lifestyles, behaviors, and interactions.