If the nominal interest rate is 8 percent and the inflation rate is 4 percent, what is the real interest rate?
A) 0.44 percent
B) 4 percent
C) 6 percent
D) 12 percent

Name: If the nominal interest rate is 8 percent and the inflation rate is 4 percent, what is the real interest rate? A) 0.44 percent B) 4 percent C) 6 percent D) 12 percent
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Question

Quizplus · Accepted Answer

The real interest rate can be approximated by subtracting the inflation rate from the nominal interest rate: 8% - 4% = 4%.

If the Nominal Interest Rate Is 8 Percent and the Inflation