When there is an increase in the expected rate of inflation

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What effect does an increase in the expected rate of inflation have on the short-run and long-run Phillips curves? When there is an increase in the expected rate of inflation, will the nominal and real interest rates on new loans increase, decrease, or stay constant? If the nominal interest rate is 8%, the expected rate of inflation is 3%, and the growth rate of the real GDP is 4%, what is the real interest rate?

Reference no: EM13157792

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