Multiple Choice
A change in the expected rate of inflation from 3 percent to 5 percent will
A) increase the real interest rate by 2 percentage points.
B) decrease the real interest rate by 3 percentage points.
C) increase the nominal interest rate by 2 percentage points.
D) decrease the nominal interest rate by 2 percentage points.
Correct Answer:
Verified
Correct Answer:
Verified
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