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    Exam 17: Money Growth and Inflation: The Classical Theory of Inflation
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    If the Nominal Interest Rate Is 4 Percent and Expected
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If the Nominal Interest Rate Is 4 Percent and Expected

Question 109

Question 109

Multiple Choice

If the nominal interest rate is 4 percent and expected inflation is 2.5 percent,then what is the expected real interest rate?


A) 1.6 percent
B) 10 percent
C) 6.5 percent
D) 1.5 percent

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