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For This Question, Assume That the Nominal Interest Rate Does

Question 3

Multiple Choice

For this question, assume that the nominal interest rate does not change. In this situation, a decrease in expected inflation will cause:


A) an increase in investment.
B) an increase in the real interest rate.
C) a decrease in the real interest rate.
D) an increase in consumption.
E) an increase in money demand.

Correct Answer:

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