The equilibrium real interest rate is the rate ________.
A)at which the output gap is zero
B)at which the inflation rate is low
C)controlled by the central bank
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

The equilibrium real interest rate is the rate at which the output gap is zero, meaning the economy is producing at its full capacity without generating inflationary or deflationary pressures.

The Equilibrium Real Interest Rate Is the Rate ________