Neco Model Questions Vol1 2023 Economics Question 32
Practice objective / multiple choice question 32 from the 2023 Neco Model Questions Vol1 Economics examination.
A basket of goods cost \(\text{₦}2{,}400\) in 2020 and \(\text{₦}2{,}880\) in 2021. The nominal interest rate on a one‑year bank deposit was 12% in 2021. Compute the inflation rate between 2020 and 2021, then determine the real interest rate using the Fisher approximation. Finally, if a consumer wants a real return of at least 5% and the same inflation rate continues in 2022, what minimum nominal rate must be offered in 2022? Give your answer as a percentage to one decimal place.
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About This Question
This is Neco Model Questions Vol1 2023 Economics Question 32. It is one of the objective questions from the 2023 Neco Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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