If the Ex-Post Real Interest Rate Is 5 Percent and Actual

question 21

Multiple Choice

If the ex-post real interest rate is 5 percent and actual inflation rate is 2 percent, the nominal interest rate is

• A)7 percent.
• B)3 percent.
• C)2.5 percent.
• D)2 percent.

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Definitions:

Breach of Contract

The failure of one party to fulfill the terms of a contract without lawful excuse.

Incidental Damages

Additional costs incurred as a consequence of a breach of contract, beyond the direct damages or loss.

Lost Profits

Lost profits refer to the potential earnings a company or individual was unable to realize due to another party's wrongful acts or breaches of contract.

Defective Performance

The failure to meet the required or expected standards of performance in the execution of a contractual duty or obligation.