Suppose a bank wants to earn a real rate of interest equal to 7.23% and they expect the rate of inflation to be 6.34%.  At what interest rate will they set this loan to be?  Answer this as a percentage and round your answer to two digits after the decimal without the percentage.

Macroeconomics
13th Edition
ISBN:9781337617390
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter14: Money And The Economy
Section: Chapter Questions
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Suppose a bank wants to earn a real rate of interest equal to 7.23% and they expect the rate of inflation to be 6.34%.  At what interest rate will they set this loan to be?  Answer this as a percentage and round your answer to two digits after the decimal without the percentage. ex. If you found the inflation rate to be 5.125%, answer 5.13.

 
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