Multiple Choice
Suppose the money supply is set to grow at 7%,real GDP grows at 5%,and the expected real interest rate on Aaa corporate bonds averages 6%.Using the quantity theory of money and the Fisher equation,the nominal interest rate on the Aaa corporate bond should be
A) -2%.
B) 2%.
C) 6%.
D) 8%.
Correct Answer:
Verified
Correct Answer:
Verified
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