Explain the meaning of nominal interest rate and real interest rate. How are they related? There should...
Explain the meaning of nominal interest rate and real interest rate. How are they related? There should be +6 sentences (75 words)
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Summary: Nominal rate of interest is shows how much given sum of money is increased in nominal terms. Real interest rate shows how the purchasing power of a given sum of money is increased. Nominal interest rate = real interest rate + rate of inflation
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Explain the meaning of nominal interest rate and real
interest rate. How are they
related? There should...
When the real rate of interest is less than the nominal rate of interest, then: A....
When the real rate of interest is less than the nominal rate of interest, then: A. inflation must be added to the nominal rate. B. investment returns do not increase purchasing power. C. nominal flows should be discounted with real rates. D. inflation is expected to occur.
a. What is the relationship between real interest rate, nominal interest rate and inflation rate? b....
a. What is the relationship between real interest rate, nominal interest rate and inflation rate? b. What are the reasons for very high nominal interest rates in the 1980s? c. Explain ex-ante real rate and ex-post real rate.
In words, the real rate of interest is approximately equal to 0 the nominal rate minus...
In words, the real rate of interest is approximately equal to 0 the nominal rate minus the inflation rate. O the inflation rate divided by the nominal rate. O the nominal rate plus the inflation rate. O the nominal rate times the inflation rate. O the inflation rate minus the nominal rate.
(i) Explain the difference between the nominal and real interest rate. (ii) How does the Reserve...
(i) Explain the difference between the nominal and real interest rate. (ii) How does the Reserve Bank of Australia control the interest rate? (iii) You hear a news report that output growth and inflation are lower than expected. How do you expect that report to affect market interest rates? Explain why. (iv) The Reserve Bank faces a large recessionary gap. How would you expect it to respond? Explain step by step how its policy change is likely to affect the...
The nominal interest rate is the: same as the real interest rate. rate of interest that...
The nominal interest rate is the: same as the real interest rate. rate of interest that investors pay to borrow money. rate of inflation minus the real rate of interest. real rate of interest minus the rate of inflation.
Suppose the real interest rate in the economy is 3% and the nominal interest rate is...
Suppose the real interest rate in the economy is 3% and the nominal interest rate is 6%, what is the current inflation rate?
If the inflation rate is zero, then A.) both the nominal interest rate and the real...
If the inflation rate is zero, then A.) both the nominal interest rate and the real interest rate can fall below zero. B.) the nominal interest rate can fall below zero, but the real interest rate cannot fall below zero. C.) the real interest rate can fall below zero, but the nominal interest rate cannot fall below zero. D.) neither the nominal interest rate nor the real interest rate can fall below zero.
If the nominal rate of interest is 13.82% and the real rate of interest is 8.03%,...
If the nominal rate of interest is 13.82% and the real rate of interest is 8.03%, what is the expected rate of inflation?
If the nominal rate of interest is 12.65% and the real rate of interest is 8.12%,...
If the nominal rate of interest is 12.65% and the real rate of interest is 8.12%, what is the expected rate of inflation?
In which situation is the real interest rate highest? A) The nominal interest rate is 25%...
In which situation is the real interest rate highest? A) The nominal interest rate is 25% and the inflation rate is 30% B) The nominal interest rate is 2% and the inflation rate is 1% C) The nominal interest rate is 8% and the inflation rate 5% D) The nominal interest rate is 11% and the inflation rate 9% Please provide explanation thanks
a. What is the relationship between real interest rate, nominal interest rate and inflation rate? b. What are the reasons for very high nominal interest rates in the 1980s? c. Explain ex-ante real rate and ex-post real rate.
In words, the real rate of interest is approximately equal to 0 the nominal rate minus the inflation rate. O the inflation rate divided by the nominal rate. O the nominal rate plus the inflation rate. O the nominal rate times the inflation rate. O the inflation rate minus the nominal rate.
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