Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

If a bank posts a nominal interest rate of seven per cent per year and the inflation rate is four per cent per year, then

If a bank posts a nominal interest rate of seven per cent per year and the inflation rate is four per cent per year, then the real interest rate is:

a.

four per cent

b.

three per cent

c.

minus three per cent

d.

minus four per cent

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Foodservice Management Principles and Practices

Authors: June Payne Palacio, Monica Theis

12th edition

133003213, 9780133003215, 978-0135122167

More Books

Students also viewed these Economics questions