Multiple Choice
Suppose the nominal interest rate is 10%.The rate of inflation has been 4% and is expected to continue at 4% in the future.The real interest rate,which determines the firm's decision to purchase capital,is therefore
A) 4%.
B) 6%.
C) 10%.
D) 14%.
E) indeterminate.
Correct Answer:
Verified
Correct Answer:
Verified
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