Movement in the real interest rate affect decisions to save

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During the recent 2007-2009 economic contraction, nominal interest rates fell to nearly 0%while the rate of inflation remained positive.

a) What happened to the real interest rate?

b) How would this movement in the real interest rate affect decisions to save?

c) How would this movement in the real interest rate affect decisions to borrow?

d) If nominal interest rates were negative, what would happen to the value of your savings ata commercial bank?

Reference no: EM13862690

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