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You are given the following information about the economy: the nominal interest rate = 8 percent, and the real rate of interest = 4 percent.

You are given the following information about the economy: the nominal interest rate = 8 percent, and the real rate of interest = 4 percent. The inflation premium is

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  • 4 percent.
  • 12 percent.
  • 8 percent.
  • 2 percent.

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