What does the real interest rate tell you?

Name: What does the real interest rate tell you?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The real interest rate tells you how fast the purchasing power of your bank account rises over time, taking inflation into account. Option A and C are incorrect as they refer only to the nominal interest rate (the interest rate without adjustment for inflation), while option D is partially correct (referring to purchasing power) but not complete as it doesn't account for the impact of inflation.

What Does the Real Interest Rate Tell You