If the Nominal Rate of Interest Is 6

question 288

Multiple Choice

If the nominal rate of interest is 6.5% and the inflation rate is 3.0%,what is the real rate of interest?

• A)-9.5%
• B)-3.5%
• C)1.5%
• D)3.5%
• E)9.5%

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Definitions:

Mores

Norms that carry great moral significance, are closely related to the core values of a cultural group, and often involve severe repercussions for violators.

Law

A system of rules created and enforced through social or governmental institutions to regulate behavior, with its precise definition being a matter of longstanding debate among specialists.

Informal Norms

Unwritten rules and expectations that regulate the behavior of individuals within a society or group, without formal legal enforcement.

Formal Norms

Explicitly defined rules and regulations that guide behavior and maintain social order within a society.