If the real interest rate is 8 percent and the inflation rate is ...

[Collmarie]

If the real interest rate is 8 percent and the inflation rate is 2.5 percent, then the nominal interest rate is
 
  A) 8 percent. B) 10.5 percent. C) 3.2 percent. D) 2.5 percent. E) 5.5 percent.

Question 2

Banks can obtain funds to make loans by borrowing reserves from other banks through the federal funds market.
 
  Indicate whether the statement is true or false

[nhea]

Answer to Question 1

B

Answer to Question 2

TRUE