Suppose banks require a real interest rate of 10 percent. If they expect inflation to be 2 percent, what is the nominal interest rate?   Multiple Choice   5 percent   20 percent   8 percent   12 percent

Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter13: Inflation
Section: Chapter Questions
Problem 12SQ
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Suppose banks require a real interest rate of 10 percent. If they expect inflation to be 2 percent, what is the nominal interest rate?

 

Multiple Choice
  •  

    5 percent

  •  

    20 percent

  •  

    8 percent

  •  

    12 percent

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