Multiple Choice
Marge is lending Martin $1,000 for one year.The consumer price index is 160 at the time the loan is made and they expect it to be 176 in one year.If Marge and Martin agree that Marge should earn a 3% real return for the year,the nominal interest rate on this loan should be
A) 0%.
B) 3%.
C) 7%.
D) 10%.
E) 13%.
Correct Answer:
Verified
Correct Answer:
Verified
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