Waec Model Questions Vol1 2024 Economics Question 2
Practice objective / multiple choice question 2 from the 2024 Waec Model Questions Vol1 Economics examination.
The Consumer Price Index (CPI) rose from 150 at the end of 2022 to 165 at the end of 2023. The inflation rate for the first six months of 2023 was 8 % (prices increased by 8 % over that period). Assuming the two half‑year inflation rates compound to give the annual inflation reflected by the CPI, determine the inflation rate for the second half of 2023. A 1‑year government bond issued in 2023 carries a nominal annual interest rate of 12 % payable semi‑annually. Using the overall annual inflation rate you have found, calculate the real interest rate (to two decimal places) on the bond using the exact Fisher formula: \((1+\text{nominal})/(1+\text{inflation})-1\).
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This is Waec Model Questions Vol1 2024 Economics Question 2. It is one of the objective questions from the 2024 Waec Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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