Suppose that in a given year, the rate of inflation is 3 percent, and the nominal interest rate is 2 percent. The real interest rate is:
Question
Solution 1
The real interest rate can be calculated using the formula:
Real Interest Rate = Nominal Interest Rate - Inflation Rate
Given that the nominal interest rate is 2% and the inflation rate is 3%, we can substitute these values into the formula:
Real Interest Rate = 2% - 3% = -1%
So, the real intere Knowee AI is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI is a powerful AI-powered study tool designed to help you to solve study problem.
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