If the annual real rate of interest is 2.5%, and the expected inflation rate is 3.4%, the nominal rate of interest would be approximately
A. 4.9%.
B. 0.9%.
C. –0.9%.
D. 7%.
E. None of the options are correct.
E. None of the options are correct.
2.5% + 3.4% = 5.9%.
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