Inflation affects creditors and debtors suppose the, Econometrics

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Inflation affects creditors and debtors suppose the

Inflation affects creditors and debtors. Suppose the Canadian debtors borrowed $100 from the Canadian creditors on December 31, 1992 and promised to pay back $105 on December 31, 1993. This is equivalent to paying back a nominal interest rate of 5%

CPI For 1991: 95.12, CPI 1992: 100, CPI 1993:.117.79

Find the real interest rate, which is defined as real interest rate = nominal interest rate - inflation rate.

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Econometrics: Inflation affects creditors and debtors suppose the

Reference No:- TGS0576505

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Reference No:- TGS0576505

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