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You Borrow $10,000 from a Bank for One Year at a Nominal

Question 90

Multiple Choice

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%.If inflation over the year is 2%, what is the real interest rate you are paying?


A) 2%
B) 2.5%
C) 3%
D) 5%
E) 7%

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