If the annual real rate of interest is 3.5%, and the expected inflation rate is 2.5%, the nominal rate of interest would be approximately
A) 3.5%.
B) 2.5%.
C) 1%.
D) 6.8%.
E) None of the options are correct.

Name: If the annual real rate of interest is 3.5%, and the expected inflation rate is 2.5%, the nominal rate of interest would be approximately A) 3.5%. B) 2.5%. C) 1%. D) 6.8%. E) None of the options are correct.
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Question

Quizplus · Accepted Answer

3.5% + 2.5% = 6%.

If the Annual Real Rate of Interest Is 3