Arrange the following steps in the process of understanding how real interest rates are affected by inflation: A) Increased inflation leads to lower real interest rates, B) Consumers adjust their spending based on real interest rates, C) Nominal interest rates remain fixed, D) Real interest rates influence investment decisions.

To understand how real interest rates are affected by inflation, we start with the idea that nominal interest rates remain fixed, which means they do not change immediately when inflation rises. When inflation increases, it reduces the purchasing power of money, leading to lower real interest rates, which are the nominal rates adjusted for inflation. As real interest rates decrease, consumers and businesses notice this change and adjust their spending and investment decisions accordingly. For example, if someone sees that real interest rates are low, they might decide to borrow more money to buy a house or invest in a business. This shows how the cycle of inflation, nominal rates, and real rates influences economic behavior.