Let the price level of a given economy increase from 100 to 107.2 over the course of one year. If the nominal rate of interest were 7.2 percent over that period, then the real rate of interest would have been
A) 0 percent.
B) 5 percent.
C) 7.2 percent.
D) 12.2 percent.
E) -2.2 percent.
Correct Answer:
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