Since the early 1950s,nominal interest rates and real interest rates in the United States
A)do not always move in the same direction.
B)always increase proportionally.
C)are never moving in the same direction.
D)are of no interest to decision makers.

Question

Quizplus · Accepted Answer

Nominal interest rates and real interest rates do not always move in the same direction. Nominal interest rates refer to the rate of return on an investment without adjusting for inflation, while real interest rates adjust for inflation. Therefore, if inflation is high, nominal interest rates may increase to compensate, but the real interest rate may remain the same or even decrease. It is important for decision-makers to consider both nominal and real interest rates when making investment decisions.

Since the Early 1950s,nominal Interest Rates and Real Interest Rates