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In 2015, the real rate of interest in a country was 6% and the inflation rate then was 3%. So the nominal rate of interest in 2015 was ________.

  1. A
    3%
  2. B
    6%
  3. C
    9%
  4. D
    12%

Solution & Step-by-step Explanation

According to the Fisher equation:
Nominal Interest Rate=Real Interest Rate+Inflation Rate
Nominal Interest Rate=6%+3%=9%

Practice this question

Try it yourself before checking the explanation above.

In 2015, the real rate of interest in a country was 6% and the inflation rate then was 3%. So the nominal rate of interest in 2015 was ________.
A
3%
B
6%
C
9%
D
12%

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MacroeconomicsInterest RatesInflation

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