If the inflation rate is 2% and the nominal interest rate is 1%, then the real interest rate is around
A)-1%.
B)1%.
C)2%.
D)3%.

Name: If the inflation rate is 2% and the nominal interest rate is 1%, then the real interest rate is around A)-1%. B)1%. C)2%. D)3%.
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Question

Quizplus · Accepted Answer

The real interest rate is calculated by subtracting the inflation rate from the nominal interest rate. In this case, 1% - 2% = -1%, so the real interest rate is around -1%.

If the Inflation Rate Is 2% and the Nominal Interest