The real interest rate adjusts the nominal interest rate for:
A)exchange rate movements.
B)income growth.
C)inflation.
D)government controls.
E)none of the above

Question

The real interest rate adjusts the nominal interest rate for:​
A)exchange rate movements.
B)income growth.
C)inflation.
D)government controls.
E)none of the above

Quizplus · Accepted Answer

The real interest rate is adjusted for inflation, meaning it removes the effects of inflation from the nominal interest rate to reflect the true cost of borrowing or the true return on lending. Exchange rate movements, income growth, and government controls are not considered when calculating the real interest rate.

The Real Interest Rate Adjusts the Nominal Interest Rate For:​

The Real Interest Rate Adjusts the Nominal Interest Rate For: