If the Nominal Interest Rate Is 5 Percent and the Rate

question 256

Multiple Choice

If the nominal interest rate is 5 percent and the rate of inflation is 2 percent, then the real interest rate is

• A)7 percent.
• B)3 percent.
• C)2.5 percent.
• D).4 percent.

---

Definitions:

Counterbalanced Crossover Designs

A research method where participants are exposed to multiple conditions in a specific sequence to control for the effects of the condition order on outcomes.

Internal Validity

The degree to which the results of a study can be attributed to the interventions or variables being tested, rather than external factors.

Order Effects

The impact that the sequence of presenting stimuli or conditions can have on participant responses in an experimental design.

Systematic Bias

Describes a consistent, non-random distortion in data collection, analysis, or interpretation processes that can lead to inaccurate conclusions.