If the nominal interest rate is 7 percent and the real interest rate is 2 percent,then what is the inflation rate?
A)9.0 percent
B)5 percent
C)3.5 percent
D)None of the above is correct.

Question

Quizplus · Accepted Answer

The inflation rate can be calculated using the formula: nominal interest rate = real interest rate + inflation rate. Therefore, inflation rate = nominal interest rate - real interest rate = 7% - 2% = 5%.

If the Nominal Interest Rate Is 7 Percent and the Real