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.
Homework Answers
Correct option is (B).
Nominal interest rate = Real interest rate + Inflation rate.
Nominal interest rate is the stated, price-unadjusted interest rate which lenders charge from borrowers, and borrowers pay for loans they take. This is inflation-unadjusted.
Add Answer to:
The nominal interest rate is the:
same as the real interest rate.
rate of interest that...
The real interest rate A. is equal to the nominal interest rate minus the inflation rate.
The real interest rate A. is equal to the nominal interest rate minus the inflation rate. B. is the interest rate that adjusts GDP for changes in prices. C. is equal to the inflation rate minus the nominal interest rate. D. is the interest rate that is quoted on a financial debt and a firm's assets.
What is the real interest rate if the nominal interest rate is still 8% but inflation...
What is the real interest rate if the nominal interest rate is still 8% but inflation is 1%? Does it cost more or less to borrow than when inflation was 3%?
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.
f the real interest rate is minus 1.4% and the nominal interest rate is 0.6%, expected...
f the real interest rate is minus 1.4% and the nominal interest rate is 0.6%, expected inflation equals A. minus 2%. B. minus 0.8%. C. 0.8%. D. 2%.
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
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.
Agree or disagree? 75 word reply A nominal interest rate measures the change in dollar amounts....
Agree or disagree? 75 word reply A nominal interest rate measures the change in dollar amounts. It is quoted on bonds and loans. Nominal interest rate is simple; for example, if you borrow $1000 at a 5% interest rate, you can expect to pay $50 in interest without taking inflation into account. The con of using the nominal interest rate is the fact that it does not adjust for the inflation rate. Whereas a real interest rate does take inflation...
If expected inflation is constant, then when the nominal interest rate falls, the real interest rate...
If expected inflation is constant, then when the nominal interest rate falls, the real interest rate O A. falls by more than the change in the nominal interest rate. falls by the change in the nominal interest rate. Oc rises by the change in the nominal interest rate. OD.rises by more than the change in the nominal interest rate. QUESTION 15 According to liquidity preference theory, if there were a surplus of money, then O A. the interest rate would...
If a nominal interest rate is 8 percent, and inflation is 8 percent, then the real...
If a nominal interest rate is 8 percent, and inflation is 8 percent, then the real interest rate is: minus 2 percent. 16 percent. 0 percent. 8 percent.
If the nominal rate of interest is 13.94 %13.94% and the real rate of interest is...
If the nominal rate of interest is 13.94 %13.94% and the real rate of interest is 7.3 %7.3%, what is the expected rate of inflation? The expected rate of inflation is nothing%
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.
If expected inflation is constant, then when the nominal interest rate falls, the real interest rate O A. falls by more than the change in the nominal interest rate. falls by the change in the nominal interest rate. Oc rises by the change in the nominal interest rate. OD.rises by more than the change in the nominal interest rate. QUESTION 15 According to liquidity preference theory, if there were a surplus of money, then O A. the interest rate would...
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