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If the Nominal Interest Rate Is 4 Percent and the Expected

Question 64

Multiple Choice

If the nominal interest rate is 4 percent and the expected inflation rate is 1.5 percent,the real interest rate is

A) 3.5 percent.
B) 5.5 percent.
C) 4 percent.
D) 2.5 percent.
E) 0.25 percent.

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