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Q. Relation between nominal and real interest rate?
Relation between nominal interest rate, real interest rate and inflation
If we signify the nominal interest rate by R, real rate by r and expected inflation by pe then real interest rate is defined by:
r = R-pe or R=r+pe
Q. Money market with inflation and rising money supply? Figure: The money market with inflation and rising money supply If we let π M refer the growth rate in money
Discuss whether high indirect taxes are best way to discourage smoking
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