If the Nominal Interest Rate Is 8 Percent and the Current

question 156

Multiple Choice

If the nominal interest rate is 8 percent and the current inflation rate is 3 percent, approximately what is the real interest rate?

• A) 11 percent
• B) 8 percent
• C) 5 percent
• D) 3 percent

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Definitions:

Gas Tax

A tax imposed on the sale of gasoline, typically used to fund transportation and infrastructure projects.

Inelastic

Describes demand that is relatively unresponsive to price changes, meaning the percentage change in quantity demanded is smaller than that in price.

Consumers

Individuals or organizations that use economic goods and services generated within the economy, directly affecting demand trends and market dynamics.

Corporate Taxes

Taxes levied by governments on the income or profit of corporations and businesses.