If the Nominal Rate of Interest Is 6 Per Cent

question 74

Multiple Choice

If the nominal rate of interest is 6 per cent and the real rate of interest is 10 per cent, the rate of inflation is _____.

• A) 4%
• B) -4%
• C) 3%
• D) -3%

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Definitions:

Labor Costs

The total sum of all wages, benefits, and taxes that businesses must pay for employing workers.

Rental Rate

The cost of renting a property, piece of equipment, or other asset, typically expressed per unit of time.

Short-Run Average Cost

The average cost of production per unit in the short term, where some inputs are fixed and others are variable.

U-Shaped

A graphical representation showing a particular relationship where initial and end values are higher than those in the middle, resembling a "U" shape.