If the Nominal Interest Rate Is 8 Percent and the Real

question 15

Multiple Choice

If the nominal interest rate is 8 percent and the real interest rate is 2 percent, what is the inflation rate?

• A) 4 percent
• B) 6 percent
• C) 10 percent
• D) 16 percent

---

Definitions:

Population Standard Deviation

A measure that quantifies the amount of variation or dispersion of a set of values in a total population.

Set of Data

A set of data refers to a collection of numbers or values that relate to a particular subject or experiment.

Parameter

Numeric characteristic of a population.

Population

The entire aggregation of items or individuals from which samples can be drawn for statistical analysis.