The expected real rate of interest is 0.6%, actual inflation over the last year was 3%, and expected inflation over the next year is 7.4%. What is the current level of nominal interest rates (in %) predicted by the Fisher equation?

The expected real rate of interest is 0.6%, actual inflation over the last year was 3%, and expected inflation over the next year is 7.4%. What is the current level of nominal interest rates (in %) predicted by the Fisher equation?

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter13: Inflation

Section: Chapter Questions

Problem 10SQ

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