If the Nominal Interest Rate Was 4 Percent, the Expected

Multiple Choice

If the nominal interest rate was 4 percent, the expected real interest rate was 3 percent, and the realized real interest rate was 5 percent, then the expected inflation rate was ______and the realized inflation rate was_____ .

A) ?1 percent; 1 percent
B) ?1 percent; 2 percent
C) 1 percent; ?1 percent
D) 1 percent; 1 percent