Suppose the real interest rate is 2.1% and the nominal interest rate is 5.4%. The inflation rate is:
A)7.5%.
B)3.3%.
C)-3.3%.
D)2.1%.

Name: Suppose the real interest rate is 2.1% and the nominal interest rate is 5.4%. The inflation rate is: A)7.5%. B)3.3%. C)-3.3%. D)2.1%.
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Question

Quizplus · Accepted Answer

The inflation rate can be calculated as the difference between the nominal interest rate and the real interest rate.
Inflation rate = Nominal interest rate - Real interest rate
= 5.4% - 2.1%
= 3.3%

Suppose the Real Interest Rate Is 2