ch02 - expect the nominal rate of interest to be ANSWER i =...

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Chapter 2 Determination of Interest Rates Answers to odd-numbered problems Problems 1. Suppose the real interest rate is 6 percent and the expected inflation is 2 percent. What would you
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Unformatted text preview: expect the nominal rate of interest to be? ANSWER: i = E(INF) + i k i = 2% + 6% = 8% 7...
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