If the nominal interest rate is 11 percent and the inflation rate is 9 percent, then the real interest rate is approximately
A) 20 percent.
B) 18 percent.
C) 2 percent.
D) 4 percent.

Name: If the nominal interest rate is 11 percent and the inflation rate is 9 percent, then the real interest rate is approximately A) 20 percent. B) 18 percent. C) 2 percent. D) 4 percent.
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Question

Quizplus · Accepted Answer

The real interest rate is approximately the nominal interest rate minus the inflation rate, so 11% - 9% = 2%.

If the Nominal Interest Rate Is 11 Percent and the Inflation