Multiple Choice
Suppose that lenders want to receive a real rate of interest of 5 percent and that they expect inflation to remain steady at 2 percent in the coming years.Based on this, lenders should charge a nominal interest rate of
A) 2 percent.
B) 3 percent.
C) 5 percent.
D) 7 percent.
Correct Answer:
Verified
Correct Answer:
Verified
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