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Question: Peele and Mellis conduct a merchanting business in partnership on the following terms:
(a) Interest is to be allowed on partners capital accounts at 6 per cent per annum.
(b) Peele is to be credited with a partnership salary of £750 per annum.
(c) The balance of profit in any year is to be shared equally by the partners. After preparing their Trading and Profit & Loss Account for the year ended 31st March, 1960, but before making any provision for Interest on Capital or for Peele's partnership salary, the following balances remained on the book.
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
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