If the nominal interest rate is 7 percent and the inflation rate is 4 percent,what is the real interest rate?
A) 2 percent
B) 3 percent
C) 5 percent
D) 7 percent

Name: If the nominal interest rate is 7 percent and the inflation rate is 4 percent,what is the real interest rate? A) 2 percent B) 3 percent C) 5 percent D) 7 percent
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Question

Quizplus · Accepted Answer

Real interest rate = Nominal interest rate - Inflation rate 
Real interest rate = 7% - 4% 
Real interest rate = 3% 
Therefore, the best choice is B.

If the Nominal Interest Rate Is 7 Percent and the Inflation