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Economics inflation question Shall upvote as always Suppose the nominal rate of interest is 3%. (1) Calculate the real rate of interest when inflation is

Economics inflation question Shall upvote as always

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Suppose the nominal rate of interest is 3%. (1) Calculate the real rate of interest when inflation is equal to -5%, 0% and 7%. [3 marks] (1) Differentiate between the nominal rate of interest and the real rate of interest. [2 marks] (il) Discuss the effects of a negative real rate of interest on an economy and on businesses. [5 marks]

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