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alina1380 [7]
2 years ago
10

If real economic growth is 3%, the inflation rate is 5%, and the nominal interest rate is 7%, then the real rate of interest is:

Business
1 answer:
Elanso [62]2 years ago
3 0

Based on the information given  the real rate of interest is:2%.

<h3>Real rate of interest</h3>

Using this formula

Real rate of interest=Nominal interest rate-Inflation rate-

Where:

Inflation rate=5%

Nominal interest rate=7%

Let plug in the formula

Real rate of interest=7%-5%

Real rate of interest=2%

Inconclusion the real rate of interest is:2%.

Learn more about real rate of interest here:brainly.com/question/25877453

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2 years ago
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education and expertise

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3 years ago
According to the simple monetary model, if money is growing at 5% in the United States and 6% in the United Kingdom, while real
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Answer:

A)

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B)

If you have US dollars, then you should increase your investments in the UK because the pound will be worth more US dollars in the future.

C)

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Answer:

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Explanation:

3 0
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