If the real interest rate is 3% and the inflation rate is 6%, the nominal interest rate is
A)2%
B)3%
C)9%
D)18%

Name: If the real interest rate is 3% and the inflation rate is 6%, the nominal interest rate is A)2% B)3% C)9% D)18%
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Question

If the real interest rate is 3% and the inflation rate is 6%, the nominal interest rate is
A)​2%
B)​3%
C)​9%
D)18%

Quizplus · Accepted Answer

The nominal interest rate is derived by adding the real interest rate and the inflation rate. Therefore, nominal interest rate = real interest rate + inflation rate
= 3% + 6%
= 9%.
Hence, the correct answer is C) 9%.

If the Real Interest Rate Is 3% and the Inflation