If the real interest rate is less than zero, it implies that the real interest rate deviates from the marginal product of capital in the short run.

Question

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If the real interest rate is less than zero, it means that borrowers are essentially being paid to borrow money, which could lead to excessive borrowing and investment that may not be sustainable in the long run. This deviation from the theory of marginal product of capital in the short run can have implications for economic growth and stability.

If the Real Interest Rate Is Less Than Zero, It