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14 September, 10:13

Assume that the nominal interest rate is 11 percent, the inflation rate is 8 percent, and government debt at the beginning of the year equals $4 trillion. By how much is the government budget deficit overstated as a result of inflation?

A) $0.12trillion

B) $0.32trillion

C) $0.44trillion

D) $0.80trillion

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Answers (1)
  1. 14 September, 10:23
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    The answer is C. You're welcome
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