The Nominal Interest Rate Was 14% and the Inflation Rate

question 3

Multiple Choice

The nominal interest rate was 14% and the inflation rate was 10% initially. If the nominal interest rate fell to 7% and the inflation rate fell to 4% eventually, the real interest rate would change from _____.

• A)24% to 11%
• B)11% to 24%
• C)4% to 3%
• D)3% to 4%
• E)10% to 7%

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Definitions:

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Understanding of how to perform tasks or activities, often involving step-by-step sequences or methods.

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A form of education in which students learn by using and completing exercises with instructional software on computers.

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