If the real rate of return is 0 percent, and the inflation rate is 3 percent, then the nominal interest rate must be:
A) 0 percent.
B) 3 percent.
C) −3 percent.
D) 6 percent.

Question

Quizplus · Accepted Answer

The nominal interest rate is the sum of the real interest rate and the inflation rate. If the real rate is 0 percent and inflation is 3 percent, the nominal rate must be 3 percent.

If the Real Rate of Return Is 0 Percent, and the Inflation