Compared with lower inflation rates-higher inflation rate

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Compared with lower inflation rates, a HIGHER inflation rate will (increase/decrees) the after-tax real interest rate when the government taxes NOMIAL interest income. This tends to (encourage/discourage) saving, thereby (increasing/decreasing) the quantity of investment in the economy and (increasing/decreasing) the economy's long-run growth rate.

Reference no: EM13887096

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