If the real interest rate is 7 percent and the expected inflation rate is 2 percent,what would a person expect to have after a year?
A) 9 percent more dollars, which will purchase 7 percent more goods
B) 9 percent more dollars, which will purchase 5 percent more goods
C) 5 percent more dollars, which will purchase 7 percent more goods
D) 5 percent more dollars, which will purchase 5 percent more goods
Correct Answer:
Verified
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