Suppose that the nominal rate of inflation is 4 percent and, Ask an Expert

Economics

Suppose that the nominal rate of inflation is 4 percent and the inflation premium is 2 percent.

1.What is the real interest rate?

Alternatively, assume that the real interest rate is 1 percent and the nominal interest rate is 6 percent.

2.What is the inflation premium?

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9500088

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