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Identify how to calculate nominal interest rates and real interest rates. Assume that you put $100 in the bank. Use numeric examples to explain three

  1. Identify how to calculate nominal interest rates and real interest rates. Assume that you put $100 in the bank. Use numeric examples to explain three different scenarios in which your REAL income falls, stays the same, and increases.
  2. If the actual inflation is greater than the anticipated inflation, fully explain who would benefit and who would be hurt and explain WHY?

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