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Suppose That at a Given Point in Time the Rate

Question 62

Multiple Choice

Suppose that at a given point in time the rate of inflation in the economy is equal to 2 percent and the nominal interest rate is 5 percent. What is the real interest rate consistent with this situation?


A) 2 percent
B) -3 percent
C) 3 percent
D) 7 percent
E) None of these

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