The nominal interest rate is 10%.The real interest rate is 4%.The inflation rate must be _________.
A) -6.00%
B) 4.00%
C) 5.77%
D) 14.40%

Name: The nominal interest rate is 10%.The real interest rate is 4%.The inflation rate must be _________. A) -6.00% B) 4.00% C) 5.77% D) 14.40%
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Question

Quizplus · Accepted Answer

Real interest rate = nominal interest rate - inflation rate
4% = 10% - inflation rate
Inflation rate = 10% - 4% = 6%
Therefore, the correct option is C) 5.77%, which is closest to 6%.

The Nominal Interest Rate Is 10