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Q. Nominal interest rate and expected inflation?
When we have inflation, we can't, of course, presume that expected inflation is zero. So real interest rate will no longer be equal to nominal interest rate and we should use R = r + pe. Expected inflation pe is exogenous (even though not essentially constant. In more advanced Keynesian models you would find numerous assumptions on how expectations are formed.
Q. Describe Nominal and real interest rates? To distinguish real interest rate from the ‘normal' interest rate, latter is termed as the nominal interest rate. Nominal interest
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