Suppose that the inflation premium is 2 percent and the nominal interest rate is 9 percent. Instructions:

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Suppose that the inflation premium is 2 percent and the nominal interest rate is 9 percent.

Instructions: Round your answers to the nearest whole number.

a. What is the real interest rate?

percent

b. Given the level of inflation, how many years would it take for the price level to double?

years

Related Book For answer-question

Macroeconomics

ISBN: 9781264112456

22nd Edition

Authors: Campbell McConnell, Stanley Brue, Sean Flynn

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Posted Date: Mar 06, 2024 02:16 AM

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Suppose that the inflation premium is 2 percent and the nominal interest rate is 9 percent. Instructions:

Question:

Expert Answer:

a What is the real interest rate 7 percent Heres how to ca... View the full answer

Macroeconomics

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