If the nominal interest rate is 18 percent and the real interest rate is 6 percent, the inﬂation rate is
A) 18 percent.
B) 24 percent.
C) 12 percent.
D) 6 percent.

Name: If the nominal interest rate is 18 percent and the real interest rate is 6 percent, the inﬂation rate is A) 18 percent. B) 24 percent. C) 12 percent. D) 6 percent.
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Question

Quizplus · Accepted Answer

The real interest rate is the nominal interest rate minus the inflation rate. Therefore, inflation rate = nominal interest rate - real interest rate = 18% - 6% = 12%.

If the Nominal Interest Rate Is 18 Percent and the Real