Because US businesses will seek to buy less US capital goods, the amount of loanable cash requested varies when real interest rates in the US climb.
An interest rate that has been modified to account for inflation is known as a real interest rate. Once modified, it represents the actual cost of borrowing money for a borrower and the actual yield received by a lender or investment. A real interest rate represents the rate at which current things are preferred over future goods over time. The real interest rate is a reflection of the change in buying power received from an investment or given up by the borrower, whereas the nominal interest rate is the interest rate actually paid on a loan or investment. The entity supporting the loan or investment will typically publicize the nominal interest rate.
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