In the long run, the real interest rate depends primarily on the growth rate of the money supply.

Name: In the long run, the real interest rate depends primarily on the growth rate of the money supply.
Brand: Quizplus
Rating: 4.8 (37 reviews)

Question

Quizplus · Accepted Answer

The real interest rate is influenced by various factors such as inflation expectations, economic growth, and demand for credit. While the growth rate of money supply can have an impact on inflation and therefore nominal interest rates, it is not the sole determinant of the real interest rate.

In the Long Run, the Real Interest Rate Depends Primarily