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Business, 21.08.2019 03:30 cody1097

The nominal interest rate is currently 4.6% per year and the current expected inflation is 2.7%. suppose the fed unexpectedly increases the growth rate of the money supply, causing the inflation rate to rise unexpectedly from 2.7% to 3.2% per year. as a result of this change in inflation, the nominal interest rate will now be %. assume that the classical dichotomy holds.

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