If a change in interest rates will affect real GDP, the Fed should focus on the change in the nominal interest rate.

Name: If a change in interest rates will affect real GDP, the Fed should focus on the change in the nominal interest rate.
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The Fed should focus on the real interest rate because it reflects the cost of borrowing after adjusting for inflation, directly influencing spending, investment, and economic growth (real GDP).

If a Change in Interest Rates Will Affect Real GDP