Comparing the situation of nominal interest rate

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Comparing the situation of a nominal interest rate of 10 percent and an inflation rate of 9 percent with a nominal interest rate of 6 percent and inflation rate of 2 percent, consumers would borrow more in which situation?

A. Nominal interest rate of 10 percent since the real interest rate is 9 percent.

B. Nominal interest rate of 6 percent since the real interest rate is 2 percent.

C. Nominal interest rate of 6 percent since the real interest rate is 4 percent.

D. Nominal interest rate of 10 percent since real interest rate is 1 percent.

Reference no: EM13838126

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