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

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

Quizplus · Accepted Answer

The real interest rate can be calculated using the formula: real interest rate = nominal interest rate - inflation rate. Therefore, 8% - 3% = 5%.

If the Nominal Interest Rate Is 8 Percent and the Inflation