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You borrow money from a bank for 1 year at an interest rate of 6%. During this year the bank of Canada is worried about
You borrow money from a bank for 1 year at an interest rate of 6%. During this year the bank of Canada is worried about deflation. At the end of the year you calculate that your real rate of return was 5.2%. What was the inflation or deflation rate during the year that loan was outstanding ?
1) deflation of .8%
2) inflation of .8%
3) deflation of-.8%
4)inflation of -.8%
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