If the nominal interest rate is 8 percent and the real interest rate is 3 percent, what is the inflation rate?
A)3 percent
B)5 percent
C)8 percent
D)11 percent

Question

Quizplus · Accepted Answer

The inflation rate can be calculated by subtracting the real interest rate from the nominal interest rate:
Inflation rate = Nominal interest rate - Real interest rate
= 8% - 3%
= 5%
Therefore, the inflation rate is 5 percent.

If the Nominal Interest Rate Is 8 Percent and the Real