Which of the Following Combinations of Real Interest Rates and Inflation

question 84

Multiple Choice

Which of the following combinations of real interest rates and inflation implies a nominal interest rate of 6 percent?

• A)a real interest rate of 3 percent and an inflation rate of 2 percent.
• B)a real interest rate of 7 percent and an inflation rate of 1 percent.
• C)a real interest rate of 5 percent and an inflation rate of 1 percent.
• D)a real interest rate of 6 percent and an inflation rate of 1 percent.

---

Definitions:

Finger Stick

A simple procedure used to obtain a small blood sample by pricking the finger.

Allergy

An immune system reaction to a foreign substance that is not typically harmful to the body.

Adhesive

A substance used for sticking objects or materials together; commonly referred to as glue.

Vacuum Tube

An electronic device used to control the flow of electricity in a vacuum, commonly used in early electronics such as radios and televisions.