If the inflation rate is 3 percent and the real interest rate is 5 percent, then the nominal interest rate is:

Name: If the inflation rate is 3 percent and the real interest rate is 5 percent, then the nominal interest rate is:
Brand: Quizplus
Rating: 4.8 (60 reviews)

Question

Quizplus · Accepted Answer

The nominal interest rate is the sum of the real interest rate and the inflation rate. Therefore,

Nominal interest rate = Real interest rate + Inflation rate

= 5% + 3%

= 8%

So, the correct answer is D) 8 percent.

If the Inflation Rate Is 3 Percent and the Real