answersLogoWhite

0

AllQ&AStudy Guides
Best answer

A real interest rate and a nominal interest rate are quite similar. The only real difference between the two interest rates are that a nominal interest rate include the cost of inflation where as the real interest rate does not.

This answer is:
Related answers

A real interest rate and a nominal interest rate are quite similar. The only real difference between the two interest rates are that a nominal interest rate include the cost of inflation where as the real interest rate does not.

View page
Nominal InterestA nominal interest rate is the interest rate that does not compensate for inflation.

This is used in relation to "effective interest rate" or "real interest rate."

" Real Interest Rate = Nominal Interest Rate - Inflation Rate " Improvement suggested by Palash Bagchi.

View page

In the long run the real interest rate is determined by?

View page

the real interest rate equals nominal interest rate minus inflation rate. In the situation the inflation rate increase and the nominal interest rate remains unchanged, therefore the real interest rate must decrease.

View page

The expected real interest rate.

View page
Featured study guide
📓
See all Study Guides
✍️
Create a Study Guide
Search results