Calculate the Inflation Rate, Given a Nominal Rate of 10

question 38

Multiple Choice

Calculate the inflation rate, given a nominal rate of 10.2% and a real rate of 8.05%.

• A)2.99%
• B)2.49%
• C)1.99%
• D)1.06%

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Definitions:

Barter

An exchange system where goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money.

Commodity Money

A type of money whose value comes from a commodity of which it is made, such as gold or silver.

Goldsmiths

Historical tradespeople who crafted objects out of gold and were also involved in banking activities, such as issuing loans and safekeeping valuables.

Forerunners

Individuals or technologies that precede and predict the development of future trends or innovations, often paving the way for widespread changes.