Question: 2-6. (Real interest rates: approximation method) You have been asked for an approxi- mation of the increase in real purchasing power. How would you answer

2-6. (Real interest rates: approximation method) You have been asked for an approxi- mation of the increase in real purchasing power. How would you answer with consideration to the following conditions: What is the approximate increase in real purchasing power linked with a 3-month Treasury bill rate at 4% and a 30-year Treasury bond rate at 7%, while the inflation rate is 2%?

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