If the inflation rate is 6% and the real interest rate is 4%, then the nominal interest rate is around
A)2%.
B)-2%.
C)6%.
D)10%.

Name: If the inflation rate is 6% and the real interest rate is 4%, then the nominal interest rate is around A)2%. B)-2%. C)6%. D)10%.
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Question

Quizplus · Accepted Answer

The nominal interest rate is equal to the sum of the real interest rate and the inflation rate. Therefore, the nominal interest rate is: 
4% (real interest rate) + 6% (inflation rate) = 10%.

If the Inflation Rate Is 6% and the Real Interest