If the realized real interest rate in an economy is 6 percent,the realized inflation rate is 8 percent,and the expected inflation rate is 8 percent,then the nominal interest rate in the economy is ________.
A) 2 percent
B) 8 percent
C) 14 percent
D) 20 percent

Question

Quizplus · Accepted Answer

Nominal interest rate = Real interest rate + Expected inflation rate
Nominal interest rate = 6% + 8%
Nominal interest rate = 14%

If the Realized Real Interest Rate in an Economy Is