Which of the Following Describes the Correct Relationship Among the Nominal

question 160

Multiple Choice

Which of the following describes the correct relationship among the nominal interest rate,the real interest rate,and the inflation rate?

• A) Real interest rate = nominal interest rate + inflation rate
• B) Real interest rate = nominal interest rate - inflation rate
• C) Nominal interest rate = real interest rate - inflation rate
• D) Inflation rate = real interest rate - nominal interest rate
• E) Inflation rate = nominal interest rate + real interest rate

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