If the real instetest rate and the nominal interest rate are both negative and equal to...

If the real instetest rate and the nominal interest rate are both negative and equal to each other, then the

Expert Solution

Correct answer:

The alternative related to the inflation premium is going to be zero is the correct answer:

In the given scenario, when real as well as nominal interest rates are negative and equal with each other, then it can happen when there is a zero inflation premium in the economy.

Rahul Sunny answered 2 years ago

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