Economic models do not reflect the full complexity of reality, but instead are based on:

Which of the following statements regarding futures is true?

A) trading futures contracts on agricultural and mineral commodities makes up a majority of all trading. B) trading in financial futures involves more transactions than trading in commodity futures. C) futures trading is allowed only for financial assets. D) futures trading is allowed only for commodities.

If the inflation rate is 3% and the real interest rate is 4%, then the nominal interest rate is around

A. 12%. B. 7%. C. 3%. D. 1%.