Assuming a nominal interest rate of 6 percent, an unemployment rate of 4 percent, and an inflation rate of 2 percent, the real interest rate is approximately
A) 2 percent.
B) 4 percent.
C) 6 percent.
D) 8 percent.

Question

Quizplus · Accepted Answer

The real interest rate is calculated by subtracting the inflation rate from the nominal interest rate. So, the real interest rate would be 4% (6% nominal interest rate - 2% inflation rate).

Assuming a Nominal Interest Rate of 6 Percent, an Unemployment