Suppose the Real Interest Rate in the Economy Is 3

question 14

Multiple Choice

Suppose the real interest rate in the economy is 3% and the nominal interest rate is 6%, what is the current inflation rate?

• A)18%
• B)9%
• C)2%
• D)3%
• E)2.5%

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Definitions:

Social Benefit

The total benefit to society from a particular action or policy, including both direct benefits to participants and any external benefits to others.

Fire Extinguishers

Devices designed to extinguish or control small fires, often in emergency situations.

Total Benefit

The sum of all the advantages or gains obtained from a certain action or investment.

Externalities

Economic side effects or consequences that affect someone other than the buyer or seller, can be positive or negative.