In early 1996, the short-term interest rate in France was 3.7%, and forecast French inflation was 1.8%.
Question:
a. Based on these figures, what were the real interest rates in France and Germany?
b. To what would you attribute any discrepancy in real rates between France and Germany?
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A The French real interest rate was 10371018 1 187 The corresponding real rate ...View the full answer
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