If the nominal interest rate is 5 percent and there is a deflation rate of 3 percent,what is the real interest rate?
A)8 percent
B)2 percent
C)15 percent
D)1.7 percent

Name: If the nominal interest rate is 5 percent and there is a deflation rate of 3 percent,what is the real interest rate? A)8 percent B)2 percent C)15 percent D)1.7 percent
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Question

Quizplus · Accepted Answer

The real interest rate is calculated by subtracting the deflation rate from the nominal interest rate. So, 5% - (-3%) = 8%.

If the Nominal Interest Rate Is 5 Percent and There