If the inflation rate is 5% and the real interest rate is 4%, then the nominal interest rate is around
A)-1%.
B)1%.
C)9%.
D)20%.

Name: If the inflation rate is 5% and the real interest rate is 4%, then the nominal interest rate is around A)-1%. B)1%. C)9%. D)20%.
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Question

Quizplus · Accepted Answer

Nominal interest rate = Real interest rate + Inflation rate
Nominal interest rate = 4% + 5%
Nominal interest rate = 9% 
Therefore, the correct answer is C, i.e., 9%.

If the Inflation Rate Is 5% and the Real Interest