The nominal interest rate is 6 percent and the real interest rate is 2.5 percent.What is the inflation rate?
A)2.4 percent.
B)3.5 percent.
C)8.5 percent.
D)15 percent.

Question

Quizplus · Accepted Answer

The inflation rate can be calculated by subtracting the real interest rate from the nominal interest rate. 
Inflation rate = Nominal interest rate - Real interest rate 
= 6% - 2.5% = 3.5% 
Therefore, the inflation rate is 3.5 percent, which is option B.

The Nominal Interest Rate Is 6 Percent and the Real