Question: Question 1 4 ( 2 . 5 points ) Suppose the nominal annual interest rate on a one year loan is 1 6 percent and

Question 14(2.5 points)
Suppose the nominal annual interest rate on a one year loan is 16 percent and lenders expect inflation to be 10 percent in the next year. The real rate of interest is
6 percent.
4 percent.
16 percent.
12 percent.
Question 14(2.5 points) Suppose the nominal annual interest rate on a

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