If the annual real rate of interest is 2.5%, and the expected inflation rate is 3.4%, the nominal rate of interest would be approximately
A) 4.9%.
B) 0.9%.
C) -0.9%.
D) 7%.
E) None of the options are correct.

Name: If the annual real rate of interest is 2.5%, and the expected inflation rate is 3.4%, the nominal rate of interest would be approximately A) 4.9%. B) 0.9%. C) -0.9%. D) 7%. E) None of the options are correct.
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Question

Quizplus · Accepted Answer

2.5% + 3.4% = 5.9%.

If the Annual Real Rate of Interest Is 2