If the nominal interest rate is 5 percent,and the rate of inflation is 3 percent,then the real interest rate is equal to
A)2 percent.
B)0.6 percent.
C)1.7 percent.
D)15 percent.

Name: If the nominal interest rate is 5 percent,and the rate of inflation is 3 percent,then the real interest rate is equal to A)2 percent. B)0.6 percent. C)1.7 percent. D)15 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: 5% - 3% = 2%.

If the Nominal Interest Rate Is 5 Percent,and the Rate