If the Rate of Inflation Is -2 Percent, the Output

question 112

Multiple Choice

If the rate of inflation is -2 percent, the output gap is -5 percent, the nominal interest rate is 5 percent, and the unemployment rate is 8 percent, what is the real interest rate?

• A) 10 percent
• B) 0 percent
• C) -3 percent
• D) 7 percent
• E) 3 percent

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Definitions:

Hyperthyroidism

A condition caused by excessive secretion of the thyroid glands.

Irritability

A state of increased sensitivity or annoyance, typically as a reaction to external stimuli or personal stress.

Low Blood Pressure

A condition where blood pressure is lower than normal, potentially causing symptoms like dizziness or fainting.

Hypothyroidism

A condition caused by a marked deficiency of thyroid secretion.