If the nominal interest rate is 8% and the real interest rate is 3%, then the inflation rate equals:
A)3%
B)5%
C)8%
D)11%

Name: If the nominal interest rate is 8% and the real interest rate is 3%, then the inflation rate equals: A)3% B)5% C)8% D)11%
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Question

Quizplus · Accepted Answer

The inflation rate can be calculated using the formula: nominal interest rate = real interest rate + inflation rate. Therefore, 8% = 3% + inflation rate, which means the inflation rate is 5%.

If the Nominal Interest Rate Is 8% and the Real