If the real interest rate is 3% and expected inflation is 5%, then the nominal interest rate is

Name: If the real interest rate is 3% and expected inflation is 5%, then the nominal interest rate is
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Quizplus · Accepted Answer

The nominal interest rate is calculated by adding the expected inflation rate to the real interest rate. Therefore, nominal interest rate = real interest rate + expected inflation rate = 3% + 5% = 8%.

If the Real Interest Rate Is 3% and Expected Inflation