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:

If the real interest rate is 3% and the inflation rate is 7%, then the nominal interest rate is approximately Group of answer choices 10% 21% 3% 4% 7%

This question does not follow from 22 e) above.  This is an independent question. 22 f)  Suppose that the monetary authority sets the real interest rate using the rule:  r =  0.02 + 0.5 (π – π*), where π is the inflation rate and π* is the inflation target. Suppose that current inflation rate (π) is 6% (or 0.06) and the inflation target (π*) is 2% (or 0.02).   What is the nominal interest rate? Write your answer in _______ %.   For example, if 7%, just enter 7.

If the inflation rate is 2% then the real interest rate cannot be less than:Group of answer choices-2%2%1%0%

Multiple Choice QuestionHow is the real interest rate determined?Multiple choice question.By adding the inflation rate to the nominal interest rateBy subtracting the inflation rate from the nominal interest rateBy multiplying the inflation rate by the nominal interest rateBy subtracting the inflation rate from the real interest rate

The difference between a nominal interest rate and the rate of inflation is the _____.A.nominal interest rateB.annual percentage yieldC.compound interestD.real interest rateSUBMITarrow_backPREVIOUS