Question
You observe that one-year interest rates are currently 11.4%. Over the same period, inflation is expected to be 5.4%. According to the (actual) domestic Fisher
You observe that one-year interest rates are currently 11.4%. Over the same period, inflation is expected to be 5.4%. According to the (actual) domestic Fisher effect, what is the real one-year interest rate? Submit your final answer as a percentage rounded to two decimal places (Ex. 0.00%).
The answer is 5.69%, can someone explain why?
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Money Talks Explaining How Money Really Works
Authors: Nina Bandelj ,Frederick F. Wherry ,Viviana A. Zelizer
1st Edition
0691202893, 978-0691202891
