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If Future Price Changes Were Perfectly Anticipated by Both Borrowers

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If future price changes were perfectly anticipated by both borrowers and lenders,what would happen to the real interest rate in the future if the price level changed?


Definitions:

T Value

A value derived from a T-distribution used in hypothesis testing and in generating confidence intervals.

Individual Parameter

A specific characteristic or measure of a statistical model or equation that applies to an individual case or entity.

SSR

Sum of Squares due to Regression, a measure used in statistical analysis to determine the variability explained by the regression model.

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