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Initially the Nominal Interest Rate Is 8 Percent and the Inflation

Question 210

Multiple Choice

Initially the nominal interest rate is 8 percent and the inflation rate is 5 percent. People know that the inflation rate increases to 10 percent. What is the new nominal interest rate?


A) 8 percent
B) 3 percent
C) 13 percent
D) 11 percent

Correct Answer:

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