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The return on investing in a machine is 5 and the inflation

Suppose the return on investing in a machine is 5% and the inflation is 4%.
a) According to the Fisher equation, what should the nominal interest rate be?
B) Suppose bank A charges a nominal interest rate on loans equal to 8%. What happens?
C) Suppose bank B advertises its nominal rate on savings accounts as 12%. What happens?

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Microeconomics: The return on investing in a machine is 5 and the inflation

Reference No:- TGS0766501

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