For which rate of inflation given below will the real interest rate be higher than the nominal interest rate?
A)-0.5%
B)0.2%
C)0.5%
D)1.5%

Name: For which rate of inflation given below will the real interest rate be higher than the nominal interest rate? A)-0.5% B)0.2% C)0.5% D)1.5%
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Question

For which rate of inflation given below will the real interest rate be higher than the nominal interest rate?
A)​-0.5%
B)​0.2%
C)​0.5%
D)​1.5%

Quizplus · Accepted Answer

When the inflation rate is negative, it means deflation is occurring, which increases the real interest rate above the nominal interest rate.

For Which Rate of Inflation Given Below Will the Real