Assume the expected inflation rate in the United States its 2.8 percent while a risk-free asset in the United States is yielding 3.5 percent.A similar asset in Norway earns a rate of 4.8 percent.What is the inflation rate in Norway if the international Fisher effect applies?
A) 3) 2%
B) 3) 4%
C) 4) 3%
D) 4) 6%
E) 4) 1%
Correct Answer:
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