The real rate of interest is 3 percent and inflation is 4 percent. What is the nominal rate of interest?
Multiple Choice
A. 3.00 percent
B. 1.00 percent
C. 7.12 percent
D. -1.00 percent
(1+real rate)=(1+nominal rate)/(1+inflation rate)
(1+0.03)=(1+nominal rate)/(1+0.04)
1+nominal rate=(1.03*1.04)
nominal rate=(1.03*1.04)-1
=7.12%(Approx).
The real rate of interest is 3 percent and inflation is 4 percent. What is the...
The nominal interest rate is 8 percent and the inflation rate is 3 percent. What is the real interest rate? a. 8 percent b. 2 percent c. 11 percent d. 5 percent
If the nominal interest rate is 7.9 percent and the inflation rate is 3.0 percent, the real interest rate is _______________ percent.
Suppose the real interest rate is 3% and expected inflation is 3%. What is the nominal interest rate?nominal interest rate: = _______ %All else equal, if inflation decreases by 0 %, what will happen to the nominal interest rate?The real interest rate will decrease by 0 %.The nominal interest rate will decrease by 0 %.The nominal interest rate will increase by 0 %.The real interest rate will increase by 0 %.What do economists call the relationship between the nominal interest...
If a nominal interest rate is 8 percent, and inflation is 8 percent, then the real interest rate is: minus 2 percent. 16 percent. 0 percent. 8 percent.
If the nominal interest rate is 7.5 percent and the inflation rate is 4.0 percent, what is the real interest rate?
20. The velocity of circulation is growing at 3 percent a year, the real interest rate is 4 percent a year, the nominal interest rate is 8 percent a year, and the growth rate of real GDP is 4 percent a year. Calculate the inflation rate, the growth rate of money, and the growth rate of nominal GDP. The inflation rate is ___ percent a year. The growth rate of money is ___ percent a year. The growth rate of...
Suppose the real interest rate is 3% and expected inflation is 3%. What is the nominal interest rate? nominal interest rate:
a. What is the relationship between real interest rate, nominal interest rate and inflation rate? b. What are the reasons for very high nominal interest rates in the 1980s? c. Explain ex-ante real rate and ex-post real rate.
1.7 If the real interest rate is negative, then: a) the inflation rate is larger than the nominal interest rate. b) the inflation rate is smaller than the real interest rate. c) the inflation rate is smaller than the nominal interest rate. d) lenders will gain. e) the real value of a loan will increase.
If the inflation rate 23% and real rate is 12%, what is the nominal interest rate? A. 37.76% B. 38.2% C. 25.0% D. 35.0%