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If the Short-Term Nominal Interest Rate Is 3

Question 94

Multiple Choice

If the short-term nominal interest rate is 3.4%,the term structure effect is 1.2%,the default-risk premium is 1.4%,and the expected rate of inflation is 2.7%,the long-term real interest rate will be


A) -1.9%.
B) 0.5%.
C) 3.3%.
D) 8.7%.

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