If the expected inflation rate is 4 percent and the nominal interest rate is 9 percent,the expected real interest rate is _____.
A)13 percent
B)−5 percent
C)9 percent
D)−13 percent
E)5 percent

Question

Quizplus · Accepted Answer

The expected real interest rate can be calculated using the formula: real interest rate = nominal interest rate - expected inflation rate. Therefore, 9% - 4% = 5%.

If the Expected Inflation Rate Is 4 Percent and the Nominal