If inflation is at 3% and interest rate is 5%, the real… - Inflation (General Studies) Solved Question

Solved UPSC CDS/OTA Question

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Q · Inflationmoderate · 45s

If inflation is at 3% and interest rate is 5%, the real interest rate is:

TopicInflation

Question Typemultiple choice

Difficultymoderate

Marking+1 / −0.33

Test Duration30 min

Step-by-Step Solution

Every step explained - no skipped algebra.

Real interest rate = Nominal interest rate - Inflation rate = 5% - 3% = 2%.

Final Answer: Option A - 2%