In Which Case Below Is the Real Interest Rate the Highest

question 242

Multiple Choice

In which case below is the real interest rate the highest?

• A)the nominal interest rate = 1% and inflation = 3%
• B)the nominal interest rate = 6% and inflation = 4%
• C)the nominal interest rate = 2% and inflation = -1%
• D)the nominal interest rate = 2% and inflation = 1%

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Definitions:

Unimpaired

In a state of being undamaged, unaffected, or able to function at full capacity without any reduction in value or quality.

Optimization

The process of making something as fully perfect, effective, or functional as possible, often by using mathematical models or algorithms.

Equity

Fairness or justice in the way people are treated, often considered in contexts like economics, law, and social issues.