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In which of the following situations would the nominal interest rate be the highest 1.The real interest rate is -1 percent, and the expected inflation
In which of the following situations would thenominal interest rate be the highest
1.The real interest rate is -1 percent, and the expected inflation rate is 3 percent.
2.The real interest rate is 0 percent, and the expected inflation rate is 1 percent.
3.The real interest rate is 1 percent, and the expected inflation rate is -1 percent.
4.The real interest rate is 2 percent, and the expected inflation rate is 2 percent.
5.The real interest rate is 3 percent, and the expected inflation rate is 0 percent.
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