Suppose the nominal interest rate is 6 percent, and the inflation rate is 4 percent.What is the real interest rate?
A) 10 percent
B) 2 percent
C) -2 percent
D) -10 percent

Name: Suppose the nominal interest rate is 6 percent, and the inflation rate is 4 percent.What is the real interest rate? A) 10 percent B) 2 percent C) -2 percent D) -10 percent
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Question

Suppose the nominal interest rate is 6 percent, and the inflation rate is 4 percent.What is the real interest rate?  
A) 10 percent 
B) 2 percent 
C) -2 percent 
D) -10 percent

Quizplus · Accepted Answer

Real interest rate = Nominal interest rate - Inflation rate
Real interest rate = 6% - 4% = 2%

Suppose the Nominal Interest Rate Is 6 Percent, and the Inflation