You Borrow at a Nominal Interest Rate of 10 Percent

question 258

Multiple Choice

You borrow at a nominal interest rate of 10 percent.If the inflation rate is 4 percent,then the real interest rate is

• A)the $10 in interest you have to pay.
• B)16 percent.
• C)2.5 percent.
• D)6 percent.
• E)14 percent.

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