The real rate of interest is the interest rate
A)charged on long-term government bonds.
B)associated with a riskless loan.
C)that large commercial banks charge their best customers.
D)after adjustment has been made for inflation.

Question

Quizplus · Accepted Answer

The real rate of interest is the nominal interest rate adjusted for inflation, reflecting the true cost of borrowing or the true yield on an investment, after accounting for the change in purchasing power.

The Real Rate of Interest Is the Interest Rate