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If You Borrow Money at a 9% Nominal Rate and the Inflation

Question 69

Multiple Choice

If you borrow money at a 9% nominal rate and the inflation rate is 2%,what is the real interest rate on the loan?

A) 9.0%
B) 11.0%
C) 7.0%
D) 2.0%
E) 4.5%

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