If the Nominal Interest Rate Is 6 Percent and the Inflation

question 114

Multiple Choice

If the nominal interest rate is 6 percent and the inflation rate is 4 percent,

• A)the real interest rate is 10 percent
• B)the real interest rate is 2 percent
• C)the real interest rate is -2 percent
• D)the real interest rate is -10 percent
• E)there is insufficient information to determine the real rate of interest

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