Money in high inflation with negative real interest rates
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1. What effect would a period of rapid inflation likely have on the role of money as a store of value, and on people's attitudes toward money generally? Why?
2. in 1973-75, real interest rates were actually negative.
(a) what would a negative real interest rate mean?
(b) what could explain such an unusual development?
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We can see many examples from history (Argentine, Ukraine, Weimar Germany, etc.). ......
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1 We can see many examples from history (Argentine, Ukraine, Weimar Germany, etc.). People consider money as useless as a store of value. So, they spend their earnings as soon as they receive it, preferably buying things that will maintain their value or become more valuable like ...
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