Suppose that the nominal interest rate is 6% and the expected inflation rate is 2%. If banks and the public expect the inflation rate to increase to 4% a Banks will keep their nominal interest rates at 6% b Banks will increase their nominal interest rates c Banks will lend more money to borrowers d The real interest rate should increase also
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Home » Business » Suppose that the nominal interest rate is 6% and the expected inflation rate is 2%. If banks and the public expect the inflation rate to increase to 4% a Banks will keep their nominal interest rates at 6% b Banks will increase their nominal interest