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In an attempt to lower inflation, the Reserve Bank of Zimbabwe has raised its interest rate to 50 percent a year. Steve H. Hanke, an
In an attempt to lower inflation, the Reserve Bank of Zimbabwe has raised its interest rate to 50 percent a year. Steve H. Hanke, an economics professor at Johns Hopkins University estimates Zimbabwe's inflation rate is 570 percent per year. To achieve a real interest rate above zero, how must the Reserve Bank of Zimbabwe change the nominal interest rate? A. change the CPI's reference base year B. raise the nominal interest rate above 570 percent a year C. lower the nominal interest rate to zero D. change the CPI market basket E. set the nominal interest rate equal to the inflation rate
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