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What is the nominal interest rate

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Suppose the CPI in Maryland is 110 and the CPI in Texas 1999 is 100 and you are given that the nominal income in Texas is $5000 while the nominal income in Maryland is $5100. Suppose you are given a job offer in each state. Which offer should you take if you are indifferent about the different environment in each state? Explain your answer thoroughly and include necessarily calculations or numbers.

Suppose the CPI of the US in 1990 was 120 and the CPI in 2003 was 200. For how much could a car that cost $20,000 in 2003 have been bought in 1990? Explain your answer thoroughly and include necessarily calculations or numbers.

If the real interest rate is 5% and inflation rate is 3 %, what is the nominal interest rate?

Reference no: EM132051560

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