If nominal interest rates remain unchanged but inflation increases, what happens to the real interest rate and consumer behavior?

When nominal interest rates stay the same but inflation goes up, the real interest rate actually decreases. The real interest rate is the nominal rate minus the inflation rate, so if inflation rises, it reduces the purchasing power of money. For example, if the nominal interest rate is 5% and inflation increases from 2% to 4%, the real interest rate drops from 3% to 1%. This lower real interest rate can make saving less appealing, as people see their money losing value over time. As a result, consumers may choose to spend more now rather than save, thinking that their savings won't buy as much in the future.