The natural rate of interest is the real interest rate:
A)at which the demand for goods and services equals the natural level of output.
B)that most people anticipate based on their expectations of inflation.
C)at which the natural rate of unemployment equals the natural rate of output.
D)equal to the nominal interest rate minus the natural rate of inflation.

Question

Quizplus · Accepted Answer

The natural rate of interest is the real interest rate at which the economy's output is at its natural level, meaning the demand for goods and services equals the natural level of output.

The Natural Rate of Interest Is the Real Interest Rate