If the anticipated inflation rate is 5 percent and the nominal interest rate is 9 percent,the real interest rate will be
A)4 percent.
B)Negative 14 percent.
C)14 percent.

Name: If the anticipated inflation rate is 5 percent and the nominal interest rate is 9 percent,the real interest rate will be A)4 percent. B)Negative 14 percent. C)14 percent.
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Question

Quizplus · Accepted Answer

The real interest rate is calculated as nominal interest rate minus inflation rate. Therefore, real interest rate = 9% - 5% = 4%.

If the Anticipated Inflation Rate Is 5 Percent and the Nominal