The Nominal Interest Rate Is 6 Percent and the Real

question 358

Multiple Choice

The nominal interest rate is 6 percent and the real interest rate is 2 percent. What is the inflation rate?

• A)3 percent.
• B)4 percent.
• C)8 percent.
• D)12 percent.

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Definitions:

Creditor

A person or entity to whom money is owed by another person or entity, known as the debtor.

Bankruptcy Code

The collection of laws and procedures that govern the process of addressing the debts of individuals and entities unable to pay them.

Exempts

means to free someone or something from an obligation, duty, or liability to which others are subject; granting immunity from a general requirement.

Individual Debtor

A person who owes money to creditors; in legal contexts, often pertaining to bankruptcy procedures.