If the Nominal Interest Rate Is 2

question 64

Multiple Choice

If the nominal interest rate is 2.5 percent and the inflation rate is 2 percent,what is the real interest rate?

• A).5 percent
• B)1.25 percent
• C)4.5 percent
• D)None of the above is correct.

---

Definitions:

Farm Income

The earnings obtained from agricultural activities and operations, including crop sales, livestock sales, and government subsidies.

Surpluses

Situations in which the quantity of a good or service supplied exceeds the quantity demanded at a given price.

Migration

The movement of individuals or groups from one location to another, often for reasons such as employment, education, or economic opportunities.

Price Supports

Government interventions to maintain the price of a good or service at a certain level to encourage production and protect producers.