If the nominal interest rate is 9% and expected inflation is 11%, then the real interest rate is

Name: If the nominal interest rate is 9% and expected inflation is 11%, then the real interest rate is
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Quizplus · Accepted Answer

The real interest rate is calculated by subtracting the expected inflation rate from the nominal interest rate. In this case, 9% - 11% = -2%. A negative real interest rate indicates that the purchasing power of the investment will decrease over time.

If the Nominal Interest Rate Is 9% and Expected Inflation