If the Nominal Interest Rate Is 8 Percent and the Inflation

question 91

Multiple Choice

If the nominal interest rate is 8 percent and the inflation rate is 3 percent, then the real interest rate equals:

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

---

Definitions:

Competitive Forces

Competitive forces refer to the various external pressures that businesses face in the market, including competition from other firms, the bargaining power of customers and suppliers, and the threat of substitutes.

Competitive Behavior

Actions taken by businesses to gain advantage over their competitors, often through pricing, innovation, or quality improvements.

Aggregate Consumption

The total amount of goods and services consumed in an economy over a specified period.

Voter Incentive

Factors or motivations that influence individuals to participate in the voting process during elections.