Shawn puts money into an account. One year later he sees that he has 5 percent more dollars and that his money will buy 6 percent more goods.
A) The nominal interest rate was 11 percent and the inflation rate was 5 percent.
B) The nominal interest rate was 6 percent and the inflation rate was 5 percent.
C) The nominal interest rate was 5 percent and the inflation rate was -1 percent.
D) None of the above is correct.
Correct Answer:
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