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:
Verified
Correct Answer:
Verified
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