Multiple Choice
Let i be the rate of inflation and r the nominal interest rate.(We use pi to denote the rate of inflation in the book.) The (exact) real rate of interest is given by
A) (r - i) /(i + 1) .
B) (r + i) /(i + 1) .
C) (r + i) /(i - 1) .
D) (r - i) /(i - 1) .
E) r - i/r.
Correct Answer:
Verified
Correct Answer:
Verified
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