Question:medium

Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R. Assertion A: The nominal interest rate can be misleading guide to cost of borrowing. Reason R: The real interest rate is nominal rate of interest plus the rate of inflation.

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Real interest rate is approximately nominal interest rate minus inflation rate: \(r=i-\pi\).

Updated On: May 22, 2026

Both A and R are correct and R is the correct explanation of A
Both A and R are correct but R is NOT the correct explanation of A
A is correct but R is not correct
A is not correct but R is correct

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The Correct Option is C

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