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Give clear definitions of the nominal and real interest rates on one-year debt contracts then briefly explain why it is that, other things equal a)
Give clear definitions of the nominal and real interest rates on one-year debt contracts then briefly explain why it is that, other things equal a) savers respond most often positively to a rise in the real rather than the nominal interest rate, b) investment generally responds negatively to a rise in the real rather than the nominal, interest rate, and c) the demand for real money balances responds negatively to a rise in the nominal, rather than the real, interest rate
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