An article in the November 11, 2022 issue of The Wall Street Journal was entitled 'October Inflation Report Shows Consumer Prices rose 7.7% From Year Earlier'. In that article appears the following: "Inflation surged last year as the U.S. economy rebounded from the Covid-19 pandemic. Prices jumped as strong consumer spending - fueled by very low interest rates and government stimulus - collided with jammed supply chains and pandemic related shortages."

1)

Is the presumption in this statement that very low interest rates, holding all else constant, cause households to increase their desired spending?

For the purposes of answering this question, please interpret "very low interest rates" to mean "a reduction in interest rates".

Make sure to distinguish between expected and actual interest rates, between pre-tax and after-tax interest rates, and between nominal and real interest rates.

Make sure to distinguish between results that follow from economic theory and results that follow from empirical evidence.