If $\bar { M }$ = 5%, $\vec { v }$
= -3%, and $\bar { P }$
= 2%, then $\bar { Y } _ { R }$
Must equal:

Question

Quizplus · Accepted Answer

The equation for the real interest rate $\bar { Y } _ { R }$ is given by $\bar { Y } _ { R } = \bar { M } - \vec { v } - \bar { P }$. Substituting the given values: $\bar { Y } _ { R } = 5\% - (-3\%) - 2\% = 5\% + 3\% - 2\% = 6\% - 2\% = 4\%$. However, since the choices do not include 4%, there might be a misunderstanding in the problem setup or choices.

If Mˉ\bar { M }Mˉ = 5 v⃗\vec { v }v = -3%, And

If $\bar { M }$ = 5 $\vec { v }$ = -3%, And