1 answer

The real interest rate O A. is equal to the nominal interest rate minus the inflation...

Question:

The real interest rate O A. is equal to the nominal interest rate minus the inflation rate. O B. is the interest rate that ad

The real interest rate O A. is equal to the nominal interest rate minus the inflation rate. O B. is the interest rate that adjusts GDP for changes in prices. O C. is equal to the inflation rate minus the nominal interest rate. OD. is the interest rate that is quoted on a financial debt and a firm's assets.

Answers

Option A.

  • Real interest rate can be best defined as the interest rate prevailing in the market and is adjusted for the affects of inflation.
  • It is usually differentiated from nominal interest rate as the nominal interest rate does not consider the inflation affects.
  • The real interest rate is usually calculated by subtracting the inflation rate from the nominal interest rate.
.

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