Question
Inflation, nominal interest rates, and real rates . Given the following information (Table) estimate the real rate with the approximate nominal interest rate equation and
Inflation, nominal interest rates, and real rates. Given the following information (Table) estimate the real rate with the approximate nominal interest rate equation and the true nominal interest rate equation (Fisher effect) for each set of nominal and inflation rates.
| Nominal Rate | Inflation Rate | Approximate Real Rate | True Real Rate |
| 13.0% | 6.0% | ||
| 6.0% | 3.0% | ||
| 18.0% | 16.0% | ||
| 2.0% | 9.0% |
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