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EXPECTED INFLATION: Carefully explain, both verbally and with supply-and-demand diagrams of the loanable funds market, how...

EXPECTED INFLATION: Carefully explain, both verbally and with supply-and-demand diagrams of the loanable funds market, how . . .

a. . . . an increase in the expected rate of inflation will cause a higher nominal interest rate.

b. . . . a decrease in the expected rate of inflation will cause a lower nominal interest rate.

PLEASE DO NOT ESE THE HANDWRITTING!!!

Thanks!!!

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