The Relationship Between the Nominal Interest Rate, the Real Interest

question 34

Multiple Choice

The relationship between the nominal interest rate, the real interest rate, and the inflation rate is that the

• A) real interest rate is equal to the nominal interest rate plus the inflation rate.
• B) nominal interest rate is equal to the real interest rate plus the inflation rate.
• C) real interest rate is equal to the nominal interest rate multiplied by the inflation rate.
• D) nominal interest rate is equal to the real interest rate divided by the inflation rate.
• E) nominal interest rate is equal to the real interest rate minus the inflation rate.

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