In the long run, the real interest rate is 3 percent, real GDP grows at 4 percent, velocity is constant, and the quantity of money grows at 8 percent. The nominal interest rate is
A)12 percent.
B)8 percent.
C)6 percent.
D)10 percent.
E)7 percent.

Question

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The Answer of In the long run, the real interest rate is 3 percent, real GDP grows at 4 percent, velocity is constant, and the quantity of money grows at 8 percent. The nominal interest rate is
A)12 percent.
B)8 percent.
C)6 percent.
D)10 percent.
E)7 percent.

In the Long Run, the Real Interest Rate Is 3