The Federal Reserve has held interest rates close to zero percent for the past seven years. Even
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The Federal Reserve has held interest rates close to zero percent for the past seven years. Even with low inflation, “real” interest rates have been negative.
Explain why with a zero interest rate, even low inflation makes the real interest rate negative. Can the real interest rate exceed the nominal interest rate?
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The real interest rate equals the nominal interest rate minus the inflation rat...View the full answer
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