# Answer on Macroeconomics Question for Jessica Richardson

Question #4602

5. Assume that the velocity of money is constant. Real GDP grows by 5% per year and the money stock grows by 14% per year. If the nominal interest rate is 11% what is the real interest rate?

Expert's answer

Real interest rate = %GDP %nominal rate / %money stock = 5% 11% / 14% =

3.92%

3.92%

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