Suppose that the nominal interest rate is 7% per year. If banks and depositors expect an inflation rate of 1% per year, the expected real interest rate is 6 % per year.

Suppose that the nominal interest rate is 7% per year. If banks and depositors expect an inflation rate of 1% per year, the expected real interest rate is 6 % per year.


Suppose that the nominal interest rate is 7% per year. If banks and depositors expect an inflation rate of 1% per year, the expected real interest rate is  6 % per year. 


[You do no need to include any decimal points]

Answer Key: 6