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6 February, 13:19

Who is a winner in unanticipated increase in real interest rates?

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  1. 6 February, 13:27
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    Answer: An unanticipated increase in the real interest rate happens when there is an unanticipated decrease in the money supply.

    Explanation:

    A real interest rate is an interest rate that takes out the effect that inflation may cause. If there is a decrease in money, interest may rise to make up for the initial loss of the money supply. By increasing the interest rates, banks are able to make more money back at a faster rate due to the higher percentage.
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