Table 16-12.Will's expenditures on food for three consecutive years,along with other values,are presented in the table below.

-Refer to Table 16-12.If the nominal interest rate was 8 percent in 2010,then

Question

Table 16-12.Will's expenditures on food for three consecutive years,along with other values,are presented in the table below.
 
-Refer to Table 16-12.If the nominal interest rate was 8 percent in 2010,then

Quizplus · Accepted Answer

The real interest rate is calculated by subtracting the inflation rate from the nominal interest rate. If the nominal interest rate was 8 percent and the real interest rate was 3 percent, it implies an inflation rate of 5 percent (8% - 5% = 3%).