The Current One-Year Nominal Interest in Canada Is 7

question 2

Multiple Choice

The current one-year nominal interest in Canada is 7%.If the anticipated inflation for the coming year in Canada is 2.5%, what is the real interest rate?

• A)4.21%
• B)4.39%
• C)4.50%
• D)7.18% real interest =

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Definitions:

Total Utility

refers to the total satisfaction gained from consuming a particular quantity of goods or services.

Marginal Utility

Marginal utility is the additional satisfaction or benefit (utility) a consumer derives from purchasing one more unit of a good or service.

Difference

A term that refers to the disparity or distinction between two or more elements, items, or phenomena.

Marginal Utility

Additional gratification or utility that comes from consuming one more unit of a product or service.