Question: If inflation is expected to average 4% during the next year and the real rate is 3.5%, what should be the current rate of interest?

If inflation is expected to average 4% during the next year and the real rate is 3.5%, what should be the current rate of interest? a. 6.0% b. 6.5% c. 7.0% d. 7.5% e. 8.0%

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