If the Nominal Interest Rate Is 7

question 115

Multiple Choice

If the nominal interest rate is 7.5 percent and the rate of inflation is -2.5 percent, then the real interest rate is

• A)-10 percent.
• B)-5 percent.
• C)5 percent.
• D)10 percent.

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Definitions:

Theodore Roosevelt

The 26th President of the United States (1901–1909) known for his progressive policies, conservation efforts, and leadership of the Rough Riders during the Spanish-American War.

Democracy

A form of government in which power is vested in the hands of the people and exercised by them directly or through freely elected representatives.

Morality

Principles and beliefs concerning the distinction between right and wrong or good and bad behavior.

Sixteenth Amendment

Constitutional amendment passed in 1913 that legalized the federal income tax.