Suppose That, Initially, the Nominal Interest Rate Is 6 Percent

question 187

Multiple Choice

Suppose that, initially, the nominal interest rate is 6 percent and the inflation rate is 3 percent. If the inflation rate increases to 6 percent, what will be the new nominal interest rate?

• A) 6 percent
• B) 1 percent
• C) 11 percent
• D) 9 percent

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Definitions:

Site

The location on or in the human body; the anatomical part.

Disease

A disorder of structure or function in a human, animal, or plant, especially one that produces specific symptoms.

Injury

Physical harm or damage to the body caused by external force or substance.

Laterality

Refers to the side on which bodily organs or structures are located, distinguished as left or right.