If nominal interest rates remain constant while inflation rises, the real interest rate will also remain constant, resulting in no impact on consumer borrowing behavior.

When nominal interest rates stay the same but inflation goes up, it means that the money you borrow will lose value over time. The real interest rate is what you actually pay after considering inflation. If inflation rises but nominal rates don't change, the real interest rate can actually decrease, which makes borrowing cheaper in real terms. For example, if the nominal interest rate is 5% and inflation rises from 2% to 4%, the real interest rate drops from 3% to 1%. This lower real interest rate can encourage consumers to borrow more because the cost of repaying loans becomes less burdensome over time.