If the nominal interest rate equals 5 percent and expected inflation is 3 percent, then the new nominal and real interest rates are respectively:

a) 3% and 5%.
b) 8% and 5%.
c) 5% and 2%.
d) 5% and 7%.
e) 7% and 5%

c) 5% and 2%.

Explanation:

Given that

Nominal interest rate = 5%

Expected inflation = 3%

We know that

Real interest rate = Nominal interest rate - inflation rate

                             = 5% - 3%

                             = 2%

And the new nominal rate is equal to given nominal interest rate i.e 5%

Therefore, we consider all information which is mentioned in the question.

d, conspicuous consumption is when you try to increase your wealth or social status (and in the case he's trying to create the perception of wealth considering he can't really afford it)

answer; career pathways;