In the Long Run, the Real Interest Rate Is 3

question 241

Multiple Choice

In the long run, the real interest rate is 3 percent, real GDP grows at 4 percent, velocity is constant, and the quantity of money grows at 8 percent.The nominal interest rate is

• A) 6 percent.
• B) 7 percent.
• C) 8 percent.
• D) 10 percent.
• E) 12 percent.

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