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Current One-Year Interest Rates Are 4% and 8% in Canada

Question 53

Multiple Choice

Current one-year interest rates are 4% and 8% in Canada and Spain respectively.The anticipated inflation in Canada is 2%.If international Fisher effect holds, what is the expected inflation in Spain?


A) 4.00%
B) 4.04%
C) 5.92%
D) 6.00% real interest (Canadian) =

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