If the nominal interest rate is 4 percent and the inflation rate is 6 percent, then the real interest rate is a.-4 percent. b.-2

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2 years ago

13

percent. c.0 percent. d.2 percent.

1 answer:

marta [7] · Answer 1 · 2023-04-24T18:53:52+03:00

The real interest rate given the nominal and inflation rate is -2 percent

<h3>How to calculate the real interest</h3>

The formula for calculating real interest given the nominal and inflation rate is expressed as:

Real interest rate ≈ nominal interest rate − inflation rate

Given the following

Real interest = 4%

inflation rate = 6%

Substituting into the formula

Real interest rate = 4% - 6%

Real interest rate = -2%

Then the real interest rate given the nominal and inflation rate is -2 percent

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