Suppose that the rate of inﬂation is 6% per year and the nominal interest rate for the year is 9%. The real rate of interest is _____.
A) 15%
B) 3%
C) 9%
D) 6%

Name: Suppose that the rate of inﬂation is 6% per year and the nominal interest rate for the year is 9%. The real rate of interest is _____. A) 15% B) 3% C) 9% D) 6%
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Quizplus · Accepted Answer

The real interest rate can be approximated using the formula: real interest rate ≈ nominal interest rate - inflation rate. Therefore, 9% - 6% = 3%.

Suppose That the Rate of Inﬂation Is 6% Per Year