If the Current Inflation Rate Is 5%,then the Nominal Rate

question 86

Multiple Choice

If the current inflation rate is 5%,then the nominal rate necessary for you to earn an 8% real interest rate on your investment is closest to:

• A)13.0%
• B)13.4%
• C)4.9%
• D)3.0%
• E)8.0%

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Definitions:

Sensory System

The part of the nervous system responsible for processing sensory information received from the environment.

Limbic System

A complex system of nerves and networks in the brain, involved with instinct and mood control, and the processing of emotions.

Autonomic Nervous System

The part of the nervous system that controls involuntary bodily functions, such as heartbeat and digestion.

Sympathetic Nervous System

Part of the autonomic nervous system responsible for activating the body's fight-or-flight response during stressful situations.