Question: 18 . When expected inflation increases, for any given nominal interest rate the: Multiple Choice cost of borrowing increases and the desire to borrow decreases.

18 .

When expected inflation increases, for any given nominal interest rate the:

Multiple Choice

  • cost of borrowing increases and the desire to borrow decreases.
  • real interest rate increases.
  • bond supply curve shifts to the left.
  • cost of borrowing decreases and the desire to borrow increases.

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