If both the nominal interest rate and the expected inflation rate increase, what will happen to the real interest rate?.

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asked Dec 19, 2023 69.4k views

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Xuanzhui · Answer 1 · 2023-12-26T02:54:21+0000

Answer:

If the nominal interest rate and expected inflation rate both increase at the same rate, which means the inflation premium is compensated, the real interest rate will remain unchanged.

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If both the nominal interest rate and the expected inflation rate increase, what will happen to the real interest rate?.

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