If the Real Interest Rate Is 5 Per Cent When

question 27

Multiple Choice

If the real interest rate is 5 per cent when the inflation rate is 4 per cent, the nominal interest rate is

• A) 1 per cent.
• B) 9 per cent.
• C) 1.25 per cent.
• D) .80 per cent.
• E) 20 per cent.

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Definitions:

Deductive Reasoning

A judgment-making process in which the outcome depends on the compatibility of several premises presumed to be factual.

Theory-Theory

The idea that children attempt to explain everything they see and hear by constructing theories.

Scaffolding

An educational approach of providing temporary support to help learners progress toward stronger understanding and greater independence in the learning process.

Conservation

In psychology, the concept that certain properties of an object remain the same despite changes in the object's appearance, a key stage in Piaget's theory of cognitive development.