The real interest rate can be thought of as
A) the price of current consumption relative to future consumption.
B) the price of current consumption completely smoothed over a lifetime.
C) the price of future consumption smoothed completely over a lifetime.
D) the price of current consumption divided by the price of current saving.

Question

Quizplus · Accepted Answer

The real interest rate represents the price that must be paid (in terms of foregone current consumption) for consuming in the present rather than in the future. It is the cost of borrowing or the return earned on saving.

The Real Interest Rate Can Be Thought of as