Multiple Choice
Samantha is lending Jack $1,000 for one year. The CPI is 1.60 at the time the loan is made, and they both expect it to be 1.68 in one year. If Samantha and Jack agree that Samantha should earn a 3 percent real return for the year, the nominal interest rate on this loan should be ________ percent.
A) 3
B) 5
C) 8
D) 11
Correct Answer:
Verified
Correct Answer:
Verified
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