If the nominal rate of interest is 13.75% and the real
rate of interest is 7.05%, What is the expected rate of inflation? (Round to
Two Decimal Places)
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nominal interest rate = 13.75%
real rate of interest = 7.05%
Expected rate of inflation =?
According to Fisher equation:
Expected inflation rate = nominal interest rate - real interest rate
= 13.75% - 7.05%
Expected inflation rate = 6.7%
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