Answer:
Option C If there is zero inflation, the nominal interest rate is equal to the real interest rate
Explanation:
The reason is that, according to Fisher Formula:
(1+n) = (1+r)*(1+i)
And here
r is real rate
i is inflation
n is nominal rate
When i is zero, then
(1+n) = (1+r)*(1+0)
(1+n) = (1+r)
1+n = 1+ r
n= 1 + r - 1
n=r
Hence the statement C is right that when inflation is zero then the nominal interest is equal to real rate.
