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AP® Macroeconomics

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Moderate

Inflation Rate Rises: Consequences with Real Interest Rates

APMACR-TYT153

When the inflation rate rises, what happens to real interest rates?

A

Real interest rates are unaffected.

B

The effect on real interest rates is indeterminate.

C

Real interest rates fall.

D

Real interest rates rise.

E

Real interest rates match the inflation rate.