Post Utme Wellspring University 2025 Economics Question 10

Practice objective / multiple choice question 10 from the 2025 Post Utme Wellspring University Economics examination.

Post Utme Wellspring University 2025 Economics Objective / Multiple Choice
Question 10 POST_UTME_WELLSPRING_UNIVERSITY • 2025 • ECONOMICS • objective

A central bank uses the following monetary policy tool: r = 2 + 0.1\( Y - Y^* \) + 0.01i, where r is the interest rate, Y is the current output, Y^* is the potential output, and i is the inflation rate. If the current output is 100, potential output is 90, and inflation rate is 2%, what is the interest rate?

Answer Options

A. 2%
B. 3%
Correct Answer C. 4%
D. 5%
Correct Answer
C
Correct Option:
4%

About This Question

This is Post Utme Wellspring University 2025 Economics Question 10. It is one of the objective questions from the 2025 Post Utme Wellspring University Economics examination.

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