If the CPI is 170 at the beginning of the year and 181 at the end, and a bank is paying a nominal interest rate of 6 per cent, we see that
A) the real interest rate is positive and is larger than 1 per cent.
B) the real interest rate is equal to zero.
C) the real interest rate is positive and is less than 1 per cent.
D) the real interest rate is negative.
E) the nominal interest rate is negative.
Correct Answer:
Verified
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