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Home Questions WS9TJGQXUG
Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Nominal Interest Rate = _____

Options:

Real Interest Rate × Inflation Rate

Real Interest Rate - Inflation rate

Real Interest Rate / Inflation rate

Real Interest Rate + Inflation rate

Correct Answer:

Real Interest Rate + Inflation rate

Explanation:

The correct answer is Option (4) → Real Interest Rate + Inflation rate

Nominal interest rate refers to the interest rate before taking inflation into account. The Nominal Interest Rate is composed of two elements: the Real Interest Rate and the Inflation Rate.

Nominal Interest Rate = Real Interest Rate + Inflation Rate

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