Use the Fisher Equation to answer the following: i) (3pts) Assuming the nominal rate of interest

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Use the Fisher Equation to answer the following:

i) (3pts) Assuming the nominal rate of interest is 2%, can the ex-post real interest rate be greater than 2%? Explain.

ii) (3pts) Assuming the ex-ante real rate of interest is 3% and actual inflation was 1%, how could the nominal rate of interest have been 7%? Explain.

Related Book For answer-question

Macroeconomics

ISBN: 978-0138014919

12th edition

Authors: Robert J Gordon

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Posted Date: May 07, 2024 10:54 PM

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Use the Fisher Equation to answer the following: i) (3pts) Assuming the nominal rate of interest

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Answer The Fisher Equation and Interest Rates The Fisher Equation relates the nominal interest rate ... View the full answer

Macroeconomics

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