Let: (1)Pt Be the Price of One Unit of a Market

question 63

Multiple Choice

Let: (1) Pt be the price of one unit of a market basket of goods it be the one-year nominal interest rate.Suppose an individual borrows the equivalent of one unit of a composite commodity today.Given this information,which of the following expressions represents (i.e.,is equal to) the real interest rate (rt) ?

• A) (1 + it) (Pet+1) / (Pt)
• B) (1 + πet+1) / (1 + it)
• C){(1 + πet+1) / (1 + it)} - 1
• D){(1 + it) (Pt) / (Pet+1)} - 1
• E)none of the above

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Expression of empathy and concern for others that is communicated while listening to them and offering positive and encouraging words.

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