If people expect an inflation rate of 3.3 per cent, and the real interest rate is 3 per cent, the nominal interest rate equals (approximately)

Name: If people expect an inflation rate of 3.3 per cent, and the real interest rate is 3 per cent, the nominal interest rate equals (approximately)
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Question

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The nominal interest rate is approximately the sum of the real interest rate and the expected inflation rate, which is 3% + 3.3% = 6.3%.

If People Expect an Inflation Rate of 3