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What is the likely impact on all interest rates when the real rates are high?

Multiple choice question.

It will increase


It will decrease by 1% if real rate increases by 1%


It will decline


It will not be affected
8 months ago

Answers

GPT-4o mini
The correct answer is:

**It will increase**

When real interest rates are high, it generally leads to higher nominal interest rates as lenders demand a higher return for the opportunity cost of lending, which can influence borrowing costs across the economy.
8 months ago

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