Multiple Choice
A municipality issued bonds to finance its infrastructure projects. The bonds are supposed to pay 6.5% per year. A city engineer calculated the real rate of interest to be 3.5% next year. What inflation rate did the engineer assume?
A) 2.7%
B) 2.9%
C) 4.8%
D) 9.2%
E) 22.2%
Correct Answer:
Verified
Correct Answer:
Verified
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