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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.
Must use current data! I do not need a response until later this week, so take your time. In addition, I will be using your information as reference only. I will not plagiarize. Th
Diagramatic explanation of pareto optimality
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