Waec Model Questions Vol1 2024 Economics Question 30

Practice objective / multiple choice question 30 from the 2024 Waec Model Questions Vol1 Economics examination.

Waec Model Questions Vol1 2024 Economics Objective / Multiple Choice Medium Difficulty
Question 30 WAEC_MODEL_QUESTIONS_VOL1 • 2024 • ECONOMICS • objective

In a certain economy the nominal interest rate is 12%. Economists expected inflation to be 8%, but actual inflation turned out to be 10%. Using the Fisher equation, determine the real interest rate actually earned and state by how many percentage points it differs from the expected real interest rate.

Answer Options

Correct Answer A. Actual real interest rate = 2%; Difference = 2 percentage points lower
B. Actual real interest rate = 3%; Difference = 1 percentage point lower
C. Actual real interest rate = 2%; Difference = 2 percentage points higher
D. Actual real interest rate = 4%; Difference = 0 percentage points lower
Correct Answer
A
Correct Option:
Actual real interest rate = 2%; Difference = 2 percentage points lower

About This Question

This is Waec Model Questions Vol1 2024 Economics Question 30. It is one of the objective questions from the 2024 Waec Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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