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According to the Keynesian transmission mechanism,an increase in the money supply causes a(n) __________ in the interest rate and a(n) __________ in investment,which in turn causes a(n) __________ in total expenditures and aggregate demand.
Nominal Interest Rate
The rate of interest before adjustment for inflation; the stated or advertised interest rate on a loan or investment.
Real Interest Rate
The interest rate adjusted for inflation, reflecting the true cost of borrowing and the true yield on lending.
Price Changes
Variations in the cost of goods and services over time, affecting consumer behavior and economic trends.
Hyperinflation
An extremely high and typically accelerating inflation rate, often resulting in the quick erosion of the real value of the local currency.
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