If the nominal interest rate is 8 percent and the rate of inflation is 3 percent,then the real interest rate is
A)-5 percent.
B)1.67 percent.
C)5 percent.
D)11 percent.

Name: If the nominal interest rate is 8 percent and the rate of inflation is 3 percent,then the real interest rate is A)-5 percent. B)1.67 percent. C)5 percent. D)11 percent.
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Question

Quizplus · Accepted Answer

The real interest rate is calculated by subtracting the inflation rate from the nominal interest rate: 8% - 3% = 5%.

If the Nominal Interest Rate Is 8 Percent and the Rate