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.

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