Suppose the inflation premium is 8.00 percent and the nominal interest rate is 4.00 percent. Instructions: In part a and b, round your answers to 2 decimal places. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. a. What is the real interest rate? b. What if the inflation premium is 9.00 percent while the nominal interest rate is 2.00 percent?

Suppose the inflation premium is 8.00 percent and the nominal interest rate is 4.00 percent. Instructions: In part a and b, round your answers to 2 decimal places. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. a. What is the real interest rate? b. What if the inflation premium is 9.00 percent while the nominal interest rate is 2.00 percent?

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter13: Inflation

Section: Chapter Questions

Problem 12SQ

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Suppose the inflation premium is 2 percent and the nominal interest rate is 1 percent. a. What is the real interest rate? b. What if the inflation premium is 3 percent while the nominal interest rate is 0.5 percent?
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