Suppose that the inflation premium is 2 percent and the nominal interest rate is 9 percent....

Question

Question

Suppose that the inflation premium is 2 percent and the nominal interest rate is 9 percent.

Instructions: Round your answers to the nearest whole number.

a. What is the real interest rate?

percent

b. Given the level of inflation, how many years would it take for the price level to double?

years

Answer 1

Answer #1

Answer 2

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