An artist buys scrap metal from a local steel mill as a raw material for her sculptures. Last year, she purchased $5,000 metal. With the steel she produced 10 authentic sculptures that she sold for $800 each to a local art dealer, then sold all of the sculptures to art collectors for an average of $1,000 each. The total value added of the artist is $2000. (Enter your response as an integer.) The real interest rate
1. is the interest rate that adjusts GDP for changes in prices.
2. is the interest rate that is quoted on a financial debt and a firm's assets.
3. is equal to the nominal interest rate minus the inflation rate.
4. is equal to the inflation rate minus the nominal interest rate.
Suppose an economy has an inflation rate of 3.5% and a bank makes a loan with an interest rate of 6.2%. In this case, the real interest rate is |3.2|%. (Enter your response rounded to one decimal place.)