The Real Interest Rate Is 4 Percent a Year

question 167

Multiple Choice

The real interest rate is 4 percent a year. When the inflation rate is zero, the nominal interest rate is approximately ________ percent a year; and when the inflation rate is 2 percent a year, the nominal interest rate is approximately ________ percent a year.

• A) 0; 2
• B) 4; 6
• C) 6; 8
• D) 6; 4

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