Assume the Expected Inflation Rate in the United States Its

question 54

Multiple Choice

Assume the expected inflation rate in the United States its 2.8 percent while a risk-free asset in the United States is yielding 3.5 percent.A similar asset in Norway earns a rate of 4.8 percent.What is the inflation rate in Norway if the international Fisher effect applies?

• A)3)2%
• B)3)4%
• C)4)3%
• D)4)6%
• E)4)1%

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