1. If the inflation rate increases and the higher rate is sustained over an extended period of time, what will happen to the nominal interest rate?

1. If the inflation rate increases and the higher rate is sustained over an extended period of time, what will happen to the nominal interest rate? What will happen to the real interest rate? 2. When the U.S. Dollar appreciates against the Euro, fewer dollars will be required to purchase a Euro. Is this true? If the dollar appreciates, how will this affect net exports? 3. Can output rates beyond the economys long run potential be achieved? Can they be sustained? Why or why not?