Answer:
B. is equal to the nominal interest rate minus the inflation rate
(II) 3.4% simplify method
3.317% fisher formula
Explanation:
5.9 - 2.5 = 3.4 real rate
or using fisher formula
[tex]\frac{1+rate}{1+inflation} - 1 = $real rate[/tex]
1.059/1.025 - 1= 3.317 real rate