Solved

If the Rate of Inflation Is 2 Percent, the Output

Question 32

Multiple Choice

If the rate of inflation is 2 percent, the output gap is 0 percent, the nominal interest rate is 3 percent, and the unemployment rate is 10 percent, what is the real interest rate?


A) 1 percent
B) 2 percent
C) -7 percent
D) -1 percent
E) 3 percent

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q3: In the aftermath of the financial crisis

Q26: The price-to-earnings ratio is useful in identifying

Q28: The burst of the housing bubble

Q28: Economists believe that bailing out banks in

Q30: The burst of the housing bubble

Q33: If the rate of inflation is -2

Q34: Which of the following represents the

Q35: If <span class="ql-formula" data-value="R ^

Q72: Economists believe that the way that policymakers

Q101: In the IS/MP framework, when the Fed