The nominal interest rate is 5 percent and the real interest rate is 3 percent.What is the inflation rate?
A)8 percent
B)15 percent
C)2 percent
D)1.7 percent

Question

Quizplus · Accepted Answer

The inflation rate can be found by subtracting the real interest rate from the nominal interest rate. 
Inflation rate = Nominal interest rate - Real interest rate 
= 5% - 3% 
= 2% 
Therefore, the correct answer is C) 2 percent.

The Nominal Interest Rate Is 5 Percent and the Real