The Nominal Interest Rate Is 5 Percent and the Real

question 65

Multiple Choice

The nominal interest rate is 5 percent and the real interest rate is 3 percent. What is the inflation rate?

• A)8 percent
• B)2 percent
• C)0.2 percent
• D)-3 percent

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Definitions:

Trade Surplus

A situation where a country's exports exceed its imports during a specific time period, indicating a positive balance of trade.

Exchange Control

Refers to the regulation of a country’s currency exchange rate.

Global Business

Commercial activities that occur across national borders, involving the production, distribution, and marketing of goods and services.

Global Market

The international trading environment where goods, services, currencies, and investments are exchanged across borders.