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Assume a Nominal Interest Rate on One-Year U

Question 41

Multiple Choice

Assume a nominal interest rate on one-year U.S. Treasury Bills of 2.60% and a real rate of interest of 1.00%. Using the Fisher Effect Equation, what is the approximate expected rate of inflation in the U.S. over the next year?


A) 2.10%
B) 2.05%
C) 1.60%
D) 1.00%

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