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Suppose That, Initially, the Nominal Interest Rate Is 6 Percent

Question 196

Multiple Choice

Suppose that, initially, the nominal interest rate is 6 percent and the inflation rate is 3 percent. If the inflation rate increases to 6 percent, what will be the new nominal interest rate?


A) 6 percent
B) 11 percent
C) 1 percent
D) 9 percent

Correct Answer:

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