The Real Interest Rate Is 4 Percent a Year

question 167

Multiple Choice

The real interest rate is 4 percent a year. When the inflation rate is zero, the nominal interest rate is approximately ________ percent a year; and when the inflation rate is 2 percent a year, the nominal interest rate is approximately ________ percent a year.

• A) 0; 2
• B) 4; 6
• C) 6; 8
• D) 6; 4

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Definitions:

Metabolic Rate

The rate at which an organism converts food and oxygen into energy and waste products, influencing its speed of growth, reproduction, and aging.

Thyroid Hormone

A hormone produced by the thyroid gland that regulates metabolism, energy generation, and growth and development.

Glucose Storage

The process by which glucose is stored in the body, primarily in the liver and muscles, in the form of glycogen for later use as energy.

Melatonin

A hormone that regulates sleep and wakefulness, produced by the pineal gland in the brain.