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With no inflation, a bank would be willing to lend a business firm $5 million at an annual interest rate of 4 percent. But if

With no inflation, a bank would be willing to lend a business firm $5 million at an annual interest rate of 4 percent. But if the rate of inflation was anticipated to be 3 percent, the bank would most likely charge the firm an annual interest rate of

Multiple Choice

  • 7 percent.
  • 1 percent.
  • 3 percent.
  • 4 percent.

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