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    Economics Study Set 11
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    Exam 29: Business Cycles, Unemployment, and Inflation
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    If the Inflation Premium Is 3 Percent and the Real
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If the Inflation Premium Is 3 Percent and the Real

Question 47

Question 47

Multiple Choice

If the inflation premium is 3 percent and the real interest on a loan is 4 percent, then the nominal interest rate is


A) 1 percent.
B) −1 percent.
C) 7 percent.
D) 0.75 percent.

Correct Answer:

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