If the nominal interest rate is 10 percent and the inflation rate is 4 percent, what is the real interest rate?
A)0.44 percent
B)2.6 percent
C)6 percent
D)14 percent

Name: If the nominal interest rate is 10 percent and the inflation rate is 4 percent, what is the real interest rate? A)0.44 percent B)2.6 percent C)6 percent D)14 percent
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Question

Quizplus · Accepted Answer

The real interest rate is calculated by subtracting the inflation rate from the nominal interest rate. Therefore, 10% - 4% = 6%.

If the Nominal Interest Rate Is 10 Percent and the Inflation