E E I I IScenario 1: Suppose the economy is operating at potential GDR. Unemployment is 5%, Infation is running at 11% and the Federal Funds Rate is 8%.In scenario 1 above, what is the real short term interestrate?O 11%O 3N-3%6%O000O

To get the real short term interest rate:

Scenario 1: Suppose the economy is operating at potential GDR. Unemployment is 5%, nfation is running at 11% and the Federal Funds Rate is %. In scenario 1 above, what is the real short term interest rate? 11N 6% o0000

Scenario 1: Suppose the economy is operating at potential GDR. Unemployment is 5%, nfation is running at 11% and the Federal Funds Rate is %. In scenario 1 above, what is the real short term interest rate? 11N 6% o0000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

E E I I I
Scenario 1: Suppose the economy is operating at potential GDR. Unemployment is 5%, Infation is running at 11% and the Federal Funds Rate is 8%.
In scenario 1 above, what is the real short term interestrate?
O 11%
O 3N
-3%
6%
O000O

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