If the nominal interest rate is 7 percent and the rate of inflation is 3 percent, the real interest rate is 10 percent.

Name: If the nominal interest rate is 7 percent and the rate of inflation is 3 percent, the real interest rate is 10 percent.
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Quizplus · Accepted Answer

The real interest rate is calculated by subtracting the rate of inflation from the nominal interest rate. In this case, the real interest rate would be 4 percent (7% - 3%).

If the Nominal Interest Rate Is 7 Percent and the Rate