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    Principles of Macroeconomics Study Set 8
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    Exam 11: Measuring the Cost of Living: Correcting Economic Variables for the Effects of Inflation
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    If the Nominal Interest Rate Is 4
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If the Nominal Interest Rate Is 4

Question 39

Question 39

Multiple Choice

If the nominal interest rate is 4.2 percent and the rate of inflation is -0.5 percent,then the real interest rate is


A) -8.4 percent.
B) -2.1 percent.
C) 3.7 percent.
D) 4.7 percent.

Correct Answer:

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