Answered: Hi, can you explain in further detail…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Hi, can you explain in further detail why real interest rates will rise?

Expert Solution

Step 1: Reason behind the rise in the real interest rate.

The primary reason why the real interest rate would rise in the Malaysian financial market is that firstly:

1. The saving habit of the people have declined because they had saved enough during the pandemic because of the unforseen situation. But as soon as the pandemic got over their spending had risen on holidays and other leisure expenses this is one reason why savings fell post-pandemic.

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