Which among the following statements is correct about the relationship between inflation and interest rates?

Question

Quizplus · Accepted Answer

Inflation and interest rates have a direct relationship. As inflation increases, interest rates tend to increase. Understanding the effects of inflation is important in determining appropriate interest rates for loans, bonds, and other financial products. Thus, in order to fully understand interest rates, we need to correct for the effects of inflation.

Which Among the Following Statements Is Correct About the Relationship