Multiple Choice
Suppose the U.S.public holds $1 trillion in government bonds,all with an 8 percent nominal interest rate.If the Federal Reserve can hold that nominal rate constant,what inflation rate would make the government's net interest expense exactly zero?
A) 16 percent
B) 8 percent
C) 0 percent
D) -8 percent
Correct Answer:
Verified
Correct Answer:
Verified
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