If the Real Rate of Return Is 2 Percent, and the Inflation

question 97

Multiple Choice

If the real rate of return is 2 percent, and the inflation rate is 0 percent, then the nominal interest rate must be:

• A) 2 percent.
• B) 0 percent.
• C) 4 percent.
• D) −2 percent.

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Definitions:

Cross Tabulations

Cross tabulations are statistical tools used to analyze and compare the frequency of occurrences or relationships between two or more categorical variables.

Experimental Data

Information gathered through controlled tests and experiments to investigate hypotheses or understand cause-and-effect relationships.

Observational Data

Information collected through direct observation of behaviors, processes, or events, as opposed to data gathered through experiments or surveys.

Patronage

The support, encouragement, privilege, or financial aid that an organization or individual bestows to others.