The Nominal Interest Rate Is 6 Percent and the Inflation

question 22

Multiple Choice

The nominal interest rate is 6 percent and the inflation rate is 3 percent.What is the real interest rate?

• A)9 percent
• B)2 percent
• C)18 percent
• D)3 percent

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Definitions:

Fiscal Year

A one-year period used for financial reporting and budgeting, which does not necessarily align with the calendar year.

Federal Government

The national government of a federal country that is responsible for national affairs, the implementation of federal laws, and the administration of common interests and national decisions.

Marginal

Referring to the effect of a change in one unit on an overall condition, often used in the context of marginal cost, revenue, and utility in economics.

Payroll Tax

Taxes imposed on employers or employees, usually calculated as a percentage of the salaries that employers pay their staff.