If the nominal interest rate is 5 percent and the inflation rate is 2 percent, what is the real interest rate?
A)7 percent
B)6 percent
C)5 percent
D)3 percent

Name: If the nominal interest rate is 5 percent and the inflation rate is 2 percent, what is the real interest rate? A)7 percent B)6 percent C)5 percent D)3 percent
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Question

Quizplus · Accepted Answer

The real interest rate is calculated by subtracting the inflation rate from the nominal interest rate: 5% - 2% = 3%.

If the Nominal Interest Rate Is 5 Percent and the Inflation