A saver will lend her money to someone else if she she gets a return of 4% per year for not having use of her funds. She also thinks that prices will increase by 2% per year during the time of the loan. Which statement(s) below is/are true.
I. 4% is the desired real rate of interest
II. 6% is the approximate nominal rate of interest required
III. 2% is the expected inflation rate over the period