If the nominal interest rate is 8 percent and the inflation rate is 2 percent, the real interest rate is approximately
A) 0.25 percent.
B) 6 percent.
C) 4 percent.
D) 10 percent.

Name: If the nominal interest rate is 8 percent and the inflation rate is 2 percent, the real interest rate is approximately A) 0.25 percent. B) 6 percent. C) 4 percent. D) 10 percent.
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Question

Quizplus · Accepted Answer

The real interest rate is calculated by subtracting the inflation rate from the nominal interest rate. Therefore, 8% - 2% = 6%.

If the Nominal Interest Rate Is 8 Percent and the Inflation