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Lady bird [3.3K]
3 years ago
5

Negative inflationary surprises lead to a(n):____________.

Business
1 answer:
Vlada [557]3 years ago
3 0

Answer: increase in real interest rate

Explanation:

Negative inflationary surprises lead to an increase in the real interest rate. The real interest rate is simply defined as the rate of interest that a saver, investor, or a lender will receive after inflation ahs been allowed.

It should be noted that the real interest rate is the nominal interest rate minus inflation. Therefore, a negative inflationary surprises lead to a rise in the real interest rate.

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