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Relation between nominal interest rate, real interest rate and inflation
If we denote the nominal interest rate by R, the real rate by r and the expected inflation by pe then the real interest rate is defined by:
r= R- pe or R= r+ pe
While referring to the "EYE on YOUR LIFE" section on, discuss the macroeconomic policy issues facing the U.S. economy today based on the economic concepts you have learned in this
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