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    Exam 17: Money Growth and Inflation
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    If the Nominal Interest Rate Is 8 Percent and Expected
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If the Nominal Interest Rate Is 8 Percent and Expected

Question 280

Question 280

Multiple Choice

If the nominal interest rate is 8 percent and expected inflation is 3.5 percent, then what is the real interest rate?


A) 11.5 percent
B) 7.5 percent
C) 4.5 percent
D) 2.5 percent

Correct Answer:

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