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    Modern Principles Macroeconomics
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    Exam 12: Inflation and the Quantity Theory of Money
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    If a Lender Expects an Inflation Rate of 5% and Asks
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If a Lender Expects an Inflation Rate of 5% and Asks

Question 145

Question 145

Multiple Choice

If a lender expects an inflation rate of 5% and asks for a nominal interest rate of 10%,then the lender expects to earn a real interest rate of:


A) 2%.
B) 5%.
C) 10%.
D) 15%.

Correct Answer:

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