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Suppose People Anticipate Inflation Will Be 5 Percent During the Next

Question 166

Multiple Choice

Suppose people anticipate inflation will be 5 percent during the next several years.If the real rate of interest is 4 percent,the money rate of interest must be


A) 1 percent.
B) 4 percent.
C) 9 percent.
D) 12 percent.

Correct Answer:

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