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4. Suppose the nominal interest rate is currently 12 percent. a. If the ination rate is zero, what is the real interest rate? b. The

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4. Suppose the nominal interest rate is currently 12 percent. a. If the ination rate is zero, what is the real interest rate? b. The ination rate rises to 13 percent while the nominal interest rate remains at 12 percent. Does it make sense to lend money under these circumstances? 5. Based on the following data for a hypothetical economy. Millions Government Purchases $2000 Exports $2650 Consumption and spending $4800 Imports $2400 Private investment Spending $2000 Calculate the GDP using the expenditure approach

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