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S E28: Inflation - When money loses its value
Think Like An Economist
Why You Should Think About the Real Interest Rate
Part of the interest on a loan is to make sure that what you pay back is worth the same amount in terms of what the lender can buy with it. Economists talk about how important it is to think in real terms. That means, instead of just thinking about the dollars, think about how much it can buy you.
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