Forecasts that inflation is going to increase

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Inflation was 2% last year. Thomas forecasts that inflation is going to increase to 4% this year. Based on this forecast, Thomas most likely believes that:

The nominal rate will decrease.

The real rate will decrease and the nominal rate will increase.

The real rate will increase.

The real rate will decrease.

The nominal interest rate will increase.

Reference no: EM131510770

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