Concerning the behavior of interest rates, With the help of a graph show and briefly explain what happens to interest rates during times of an economic boom. With the help of a graph, show and briefly explain what happens to interest rates during times of higher expected inflation.

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Q: How is the interest rate affected by an increase in expected inflation

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Q: Q. Differentiate the Expected real interest rate to Realized real interest rates? Give examples.

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A: * ANSWER :-  From the given graph the answer is given as follows

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