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According to the Fisher effect, if the "real" rate of interest in a country is 3 percent and the expected annual inflation is 8 percent, what would the "nominal" interest rate be

Respuesta :

Answer:

11.24%

Explanation:

Fisher equation:

(1 + nominal interest rate) = (1 + real interest rate) x (1 + expected annual inflation)

1 + nominal interest rate = 1.03 x 1.08

--> Nominal interest rate = 11.24%

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