If the Nominal Interest Rate Is 6 Percent and the Rate

question 98

Multiple Choice

If the nominal interest rate is 6 percent and the rate of inflation is 2 percent,then the real interest rate is

• A)-4 percent.
• B)3 percent.
• C)4 percent.
• D)8 percent.

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Definitions:

Independent Variables

Variables in an experiment or model that are manipulated or controlled by the researcher to investigate their effect on dependent variables.

Dependent Variables

Variables in an experiment or model that are expected to change in response to changes in independent variables.

Intercept

In the context of a regression line, it is the expected value of the dependent variable when all independent variables are zero.

Slope

In the context of linear regression, the coefficient indicating the rate of change in the dependent variable for one unit change in an independent variable.