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The nominal interest rate (the interest you pay for your financial borrowing) in Sri Lanka is...

  1. The nominal interest rate (the interest you pay for your financial borrowing) in Sri Lanka is about 13% while in Kuwait it is about 4%. Discuss the possible reasons for the big difference in nominal interest rates in two countries.
  1. In the CPI estimation, the basket of goods and services that are consumed by an average family is kept constant. What are the implications of keeping the basket constant? Should we keep the basket constant all the time for ever?
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