In 2007 and 2008, the nation of Zimbabwe faced severe hyperinflation. By late 2008, the estimated inflation was more than one trillion percent (that’s 1,000,000,000,000) per year. Assuming an inflation rate of one trillion percent, what is the real rate of return on an investment with a two trillion percent nominal return?
10) Does the Fisher Effect approximation ( i ≈ E(INF) + iR ) provide a good estimate for the real rate of return in problem 8? How about problem 9?
11) When investors become very greedy, borrow a lot of money, and use that to buy penny stocks, this ____ the supply of loanable funds, and places ____ pressure on interest rates.
a. increases; upward
b. increases; downward
c. decreases; downward
d. decreases; upward
e. does not impact; does not place
 See table 1 of Hanke and Kwok (2009) http://object.cato.org/sites/cato.org/files/serials/files/cato-journal/2009/5/cj29n2-8.pdf