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If Current Market Rates on Treasury Bonds Are 6 Percent

Question 47

Multiple Choice

If current market rates on Treasury bonds are 6 percent and the real growth of the economy has and will be expected to grow at 3 percent. According to the Fisher effect, what is the expected rate of inflation?


A) 3%
B) 9%
C) higher than 6%
D) close to zero

Correct Answer:

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