The real rate of interest can be defined as the
A. the market rate of interest expressed in today's dollars.
B. nominal interest rate less the anticipated rate of inflation.
C. anticipated rate of inflation less the nominal interest rate.
D. nominal rate of interest less the unanticipated rate of inflation.
Answer: B
You might also like to view...
Whether a company produces fishing rods mostly by hand or using high-tech machinery is a question of
A) "When will the goods be produced?" B) "For whom will goods be produced?" C) "How will the goods be produced?" D) "Why will the goods be produced?" E) "Where will the goods be produced?"
If the annual interest rate is 4 percent, a consumer who spends $100 today
a. will have to pay back $104 to the bank b. would have to pay $104 next year to get the same goods c. will receive $96 from the bank next year d. would have to pay $96 next year to get the same goods e. is giving up the ability to spend $104 on goods next year