Assume you borrow money to buy a new car at 10 percent interest,and you think that the economy-wide rate of inflation over the life of the loan will be 8 percent.If you are correct in your assumption,your real rate of interest on the car loan will be
A) 2 percent.
B) 8 percent.
C) 10 percent.
D) 18 percent.
Correct Answer:
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