While a central bank has the power to control the economy's ________ interest rate,decisions regarding consumption and investment depend on the ________ interest rate.
A) real;nominal
B) nominal;real
C) prime business;nominal
D) nominal;overnight
E) real;overnight

Question

Quizplus · Accepted Answer

Nominal interest rates are the rates that are commonly used and reported in the media, and are the rates that central banks have the power to control. On the other hand, real interest rates take into account inflation, and decisions regarding consumption and investment are typically based on real interest rates.

While a Central Bank Has the Power to Control the Economy's