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Suppose that lenders want to receive a real rate of interest of 5 percent and that they expect inflation to remain steady at 2 percent in the coming years. Based on this, lenders should charge a nominal interest rate of Group of answer choices

Respuesta :

Answer:

the nominal interest rate is 7%

Explanation:

The calculation of the nominal interest rate is given below:

As we know that

Nominal interest rate is

= Real interest rate + Inflation rate

So,

The nominal interest rate should be

= 5% + 2%

= 7%

Hence, the nominal interest rate is 7%

The same is to be considered and relevant  

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