If the Nominal Interest Rate in an Economy Is 8

question 67

Multiple Choice

If the nominal interest rate in an economy is 8 percent and the real interest rate is 4 percent,the inflation in the economy is ________.

• A) 4 percent
• B) 8 percent
• C) 12 percent
• D) 32 percent

---

Definitions:

Operating Revenues

The income earned from a company's main business operations, excluding income from investments or secondary sources.

Operating Expenses

The costs associated with the normal operations of a business, excluding costs related to producing goods or services, like rent, utilities, and salaries.

Interest Expense

The cost incurred by a company for borrowed funds, shown as an expense on the income statement.

Dividend Payments

The distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.