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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.
what cause balance of payment curve to shift
A radiology firm charges $2,000 per exam. Uninsured patients are expected to pay list price. How much do they pay?
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Rational Expectations School Expectations on the future values of economic variables play an important role in macroeconomic analysis and economic analysis in general. Because
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