An important newspaper's headline says "BUSINESS Confidence Grows Highest in Years"
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Draw a LF market graph to show the effect of the business's confidence on the EQ real interest rate
Assume next the government decides to spend money on new highways and bridges. Would be the effect and result
of this new government borrowing on the same EQ real interest rate?
tlf
expected inflation rate decreases to zero, will the nominal interest rate be equal, greater than, less than the real
interest rate. Explain.