In 2015, the nominal rate of interest in a country was 5.5% and the inflation rate then was 2.5%. So real rate of interest in 2015 was _________.

Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R). Read the statements and choose the correct answer:
Assertion (A) The nominal interest rate comprises of a real interest rate and an expected rate of inflation and it adjusts when the inflation rate is expected to change. Hence, in the perfect international capital markets, real rate of returns are equal in the two countries.
Reason (R) The international fisher effects states that the nominal interest rate differential must be equal to the expected inflation rate differential In the two countries.

A

Both (A) and (R) are correct and (R) is the right explanation of (A)

B

Both (A) and (R) are correct, but (R) is not the right explanation of (A)

C

(A) is correct, but (R) is not correct

D

Both (A) and (R) are incorrect

In 2015 the nominal rate of interest in country was 6%, and the inflation rate then was 1.5%. So real rate of interest in 2015 was

A

7.50%

B

4.50%

C

4%

D

0.25%

In 2015, the real rate of interest in a country was 6% and the inflation rate then was 3%. So the nominal rate of interest in 2015 was

A

3%

B

6%

C

9%

D

12%

In 2015, the nominal rate of interest in a country was 8% and the inflation rate then was 2.5%. So real rate of interest in 2015 was

A

3.2 percent

B

10.5 percent

C

8 percent

D

5.5 percent

Consider the following with respect to the term 'Core Inflation': A) Core Inflation is the inflation rate of a particular basket of commodities. B) Core Inflation is the sudden increase in prices of certain items of food grains.C) Core inflation is caused by supply shock in certain essential commodities.

A

Only A

B

Only B

C

Only C

D

Only A and B

If nominal interest rate is 10% and inflation rate is 4% what is the real interest rate?

A

14%

B

6%

C

40%

D

2.5%

If nominal rate is 26% and inflation rate is 12%, then real rate can be

A

13.75%

B

11.65%

C

12.50%

D

13.50%

If real rate is 16% and an inflation rate is 8%, then nominal rate of return will be

A

27.28%

B

25.28%

C

22.28%

D

21.28%

Consider with respect to HusserI's concept of phenomena.
1. Phenomena is a substantial unity that has real properties, real parts and real changes.
2. Phenomena is no substantial unity, that has no real parts and no real changes.
3. Phenomena has no nature, but only essence.
4. Phenomena have no essence, but only nature.

A

Only (1) is true

B

Only (2) and (3) are true

C

Only (1) and (3) are true

D

Only (1), (3) and (4) are true

Read the following.
Unions demand high wages to counter inflationary pressures on the economic conditions of the working class. Higher wages enhance the purchasing power of the workers, there by raising inflation.
Which of the following inferences are wrong?
1. Unions have the sole purpose of improving the economic conditions of workers.
2. Enhanced wages increase the purchasing power of workers.
3. Inflation and purchasing power are negatively correlated.
4. Inflation drives unions to go for demanding higher wages.

A

1 and 3

B

2 and 3

C

3 and 4

D

Only 3

In 2015, the nominal rate of interest in a country was 5.5% and the inflation rate then was 2.5%. So real rate of interest in 2015 was _________.

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