Long-term government bonds now pay approximately 3 percent nominal interest. Would you prefer to trade yours in
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Long-term government bonds now pay approximately 3 percent nominal interest. Would you prefer to trade yours in for an indexed bond that paid a 1 percent real rate of interest? What if the real interest rate offered were zeroed? What if it were negative 1 percent? What do your answers to these questions reveal about your personal beliefs about future inflation?
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Related Book For
Economics Principles and Policy
ISBN: 978-1305280595
13th edition
Authors: William Baumol, Alan Blinder
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