Question: 2. Fill in the missing values in the table. Situation Nominal Expected Inflation Real policy interest rate Risk Premium Nominal Real borrowing borrowing interest interest

2. Fill in the missing values in the table. Situation Nominal Expected Inflation Real policy interest rate Risk Premium Nominal Real borrowing borrowing interest interest rate rate Interest Rate 5 a. Which situations correspond to the case where the nominal policy interest rate is at the Zero Lower Bound? b. Which situation has the highest risk premium? What two factors in bond markets lead to a positive risk premium? c. Why is it so important when the nominal policy interest rate is at the Zero Lower Bound to maintain a positive expected rate of inflation

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it not being an object for purchase or sale, lease, gift or inheritance; and

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