The nominal interest rate is 3.5 percent and the inflation rate is 1.5 percent.What is the real interest rate?
A)5.25 percent
B)5 percent
C)2.3 percent
D)2 percent

Name: The nominal interest rate is 3.5 percent and the inflation rate is 1.5 percent.What is the real interest rate? A)5.25 percent B)5 percent C)2.3 percent D)2 percent
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Question

Quizplus · Accepted Answer

Real interest rate = Nominal interest rate - Inflation rate 
Real interest rate = 3.5% - 1.5% 
Real interest rate = 2%

The Nominal Interest Rate Is 3