When the inflation rate is 4 percent and the nominal interest rate on long-term government bonds is 8 percent, the real interest rate is 12 percent.

Name: When the inflation rate is 4 percent and the nominal interest rate on long-term government bonds is 8 percent, the real interest rate is 12 percent.
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The real interest rate is calculated by subtracting the inflation rate from the nominal interest rate, so in this case, it would be 8 percent - 4 percent = 4 percent.

When the Inflation Rate Is 4 Percent and the Nominal