Consider the monetary rule . If the inflation rate is 4 percent, the marginal product of capital is 2 percent, and the target rate of inflation is 3 percent, then the real interest rate should be ________ percent.
A) 3.50
B) 3.25
C) 2.25
D) 1.75
E) 2.50

Question

Consider the monetary rule  . If the inflation rate is 4 percent, the marginal product of capital is 2 percent, and the target rate of inflation is 3 percent, then the real interest rate should be ________ percent.
A) 3.50 
B) 3.25 
C) 2.25 
D) 1.75 
E) 2.50

Quizplus · Accepted Answer

The Answer of Consider the monetary rule  . If the inflation rate is 4 percent, the marginal product of capital is 2 percent, and the target rate of inflation is 3 percent, then the real interest rate should be ________ percent.
A) 3.50 
B) 3.25 
C) 2.25 
D) 1.75 
E) 2.50

Consider the Monetary Rule