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3. Suppose that for a given economy: Inflation rate at time t It = 12%% Expected inflation rate at time t made at t-1 The,t-1

3. Suppose that for a given economy: Inflation rate at time t It = 12%% Expected inflation rate at time t made at t-1 The,t-1 = (1 - 0t-1)nit-1 - nit-1

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