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IB Economics HL 3.5.4 Real and nominal interest rates Question Bank

Practise IB Economics SL/HL 3.5.4 by applying real and nominal interest rates concepts to exam-style questions.

Syllabus
First assessment 2022
Course
Economics HL
Level
HL

Exam points

  • identify the relevant model, concept or evidence
  • apply the correct subject framework to the question
  • evaluate the result using clear evidence and subject terminology

3.5.4—Real and nominal interest rates question 1

[Maximum number: 1]

Table 1 shows the gross domestic product (GDP) of the United States of America (USA) economy from 2020 to 2023. The USA is not the fastest growing economy in the world, but it is the largest. It also has the largest budget deficit and the largest current account deficit in the world. As a result, the actions of its central bank, the Federal Reserve, always make news.

Table 1

Table 1

Calculate the real interest rate for households between January 2023 and January 2024.

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