Explain how and why the components of aggregate expenditure depend on the real interest rate. Be sure

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Explain how and why the components of aggregate expenditure depend on the real interest rate. Be sure to distinguish between the real and nominal interest rates, and explain why the distinction matters.

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Money Banking and Financial Markets

ISBN: 978-0078021749

4th edition

Authors: Stephen Cecchetti, Kermit Schoenholtz

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Question Posted: Oct 02, 2014 08:15 AM

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Explain how and why the components of aggregate expenditure depend on the real interest rate. Be sure

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The real interest rate equals the nominal rate minus expected inflation spending savings an...View the full answer

Money Banking and Financial Markets

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