If the real interest rate and the nominal interest rate was three per cent in 2005, then the inflation rate in 2005 would be:
A)six per cent
B)three per cent
C)zero per cent
D)minus three per cent

Question

Quizplus · Accepted Answer

The real interest rate is calculated by subtracting the inflation rate from the nominal interest rate. If both the real and nominal interest rates are the same, it means the inflation rate is zero percent.

If the Real Interest Rate and the Nominal Interest Rate