If the Nominal Interest Rate Is 4 Percent and the Real

question 23

Multiple Choice

If the nominal interest rate is 4 percent and the real interest rate is -2.5 percent,then the inflation rate is

• A)-6.5 percent.
• B)-1.5 percent.
• C)1.5 percent.
• D)6.5 percent.

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Definitions:

Confidence Interval

A span of values, taken from sample statistics, seen as likely to encase the value of an unidentified population parameter.

Confidence Level

The probability, expressed as a percentage, that a parameter lies within a specified range of values (confidence interval).

Population Mean

The average value of a property in a population.

Confidence Interval

A range of values, derived from the sample data, that is likely to contain the value of an unknown population parameter, with a certain degree of confidence.