In 2007, the interest rate banks in France charge each other for loans was 4.86 percent. The inflation rate in France in 2007 was 2.8 percent. The real interest rate in France is
A) 13.6 percent.
B) 2.06 percent.
C) 0.58 percent.
D) 7.62 percent

Question

Quizplus · Accepted Answer

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

In 2007, the Interest Rate Banks in France Charge Each