In 2007, the Euribor rate (the interest rate banks in Europe charge each other) was 4.86 percent. The inflation rate in France in 2007 was 2.8 percent. The real interest rate in France is

Question

Quizplus · Accepted Answer

Real interest rate = Nominal interest rate - Inflation rate
Nominal interest rate = Euribor rate = 4.86%
Inflation rate = 2.8%
Real interest rate = 4.86% - 2.8% = 2.06%

In 2007, the Euribor Rate (The Interest Rate Banks in Europe