If the nominal interest rate is 8 percent and the real interest rate is 5.5 percent,then the inflation rate is
A)-2.5 percent.
B)0.45 percent.
C)2.5 percent.
D)13.5 percent.

Name: If the nominal interest rate is 8 percent and the real interest rate is 5.5 percent,then the inflation rate is A)-2.5 percent. B)0.45 percent. C)2.5 percent. D)13.5 percent.
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Question

Quizplus · Accepted Answer

Real interest rate= Nominal interest rate - Inflation rate
5.5% = 8% - Inflation rate
Inflation rate = 8% - 5.5% = 2.5%

If the Nominal Interest Rate Is 8 Percent and the Real