If the real interest rate is 8 per cent and the inflation rate is 2.5 per cent,then the nominal interest rate is
A)2.5 per cent.
B)10.5 per cent.
C)8 per cent.
D)5.5 per cent.
E)3.2 per cent.

Name: If the real interest rate is 8 per cent and the inflation rate is 2.5 per cent,then the nominal interest rate is A)2.5 per cent. B)10.5 per cent. C)8 per cent. D)5.5 per cent. E)3.2 per cent.
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Question

Quizplus · Accepted Answer

Nominal interest rate = Real interest rate + Inflation rate 
= 8% + 2.5% 
= 10.5%

If the Real Interest Rate Is 8 Per Cent and the Inflation