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For This Question,assume That Expected Inflation Is Equal to the Nominal

Question 5

Multiple Choice

For this question,assume that expected inflation is equal to the nominal interest rate.In this situation,which of the following is correct?


A) The real interest rate is negative.
B) The real interest rate is positive.
C) The real interest rate is higher than the nominal interest rate.
D) The real interest rate is zero.

Correct Answer:

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