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If the Expected Inflation Rate Was 2

Question 32

Multiple Choice

If the expected inflation rate was 2.5%,the expected real interest rate was 4.0%,and the real interest rate turned out to be 5.1%,then the nominal interest rate equals


A) 1) 4%.
B) 1) 5%.
C) 2) 6%.
D) 6) 5%.

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