We Can Write the True Relationship Between the Nominal Interest

question 98

Multiple Choice

We can write the true relationship between the nominal interest rate and the real rate and expected inflation as ________.

• A)(1 + r)= (1 + r)× (1 + h*)
• B)r = (1 + r*)× (1 + h)- 1
• C)r* = (1 + r)× (1 + h)-1
• D)r = (1 + r*)× (1 + h)+ 1

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