Which of the following is the best measure of the effects of interest rates on aggregate expenditure?
A)The real interest rate
B)The nominal interest rate
C)The discount rate
D)The Treasury bill rate
E)The federal funds rate

Question

Quizplus · Accepted Answer

The real interest rate is the best measure of the effects of interest rates on aggregate expenditure because it takes into account inflation. Nominal interest rates do not account for inflation, and measures like the discount rate, Treasury bill rate, and federal funds rate are more specific to certain types of lending and borrowing, rather than overall expenditure.

Which of the Following Is the Best Measure of the Effects