If inflation is 8 per cent and the real interest rate is 3 per cent, then the nominal interest rate must be
A) 3/8 per cent.
B) -5 per cent.
C) 5 per cent.
D) 11 per cent.
E) 24 per cent.

Name: If inflation is 8 per cent and the real interest rate is 3 per cent, then the nominal interest rate must be A) 3/8 per cent. B) -5 per cent. C) 5 per cent. D) 11 per cent. E) 24 per cent.
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Question

Quizplus · Accepted Answer

Nominal interest rate = Real interest rate + Inflation rate
Nominal interest rate = 3% + 8%
Nominal interest rate = 11%

If Inflation Is 8 Per Cent and the Real Interest