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A tax increase, holding government spending constant O reduces the equilibrium real interest rate. O increases the equilibrium real interest rate. O increases the nominal
A tax increase, holding government spending constant O reduces the equilibrium real interest rate. O increases the equilibrium real interest rate. O increases the nominal interest rate leaving the real interest rate unchanged. O has no effect on nominal or real interest rates. Question 10 If the real interest rate is 3% and the expected rate of inflation is 4%, the nominal interest rate is @ 1%. @ 7%. 12%
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