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Assume that the nominal interest rate is 11 percent, the inflation rate is 8 percent, and government debt at the beginning of the year equals $4 trillion. By how much is the government budget deficit overstated
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Assume that the nominal interest rate is 11 percent, the inflation rate is 8 percent, and government debt at the beginning of the year equals $4 trillion. By how much is the government budget deficit overstated as a result of inflation?

A) $0.12trillion
B) $0.32trillion
C) $0.44trillion
D) $0.80trillion

User Ali Ashraf
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The answer is C. You’re welcome
User Chuck Lantz
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