What kind of economic variables are the interest rates when adjusted for the effects of inflation?
A) nominal
B) real
C) stock
D) flow

Question

Quizplus · Accepted Answer

When interest rates are adjusted for the effects of inflation, they become real interest rates. Real interest rates reflect the actual purchasing power of the interest earned or paid. Nominal interest rates, on the other hand, do not take inflation into account and only reflect the nominal rate of return. Stock and flow are not related to interest rates adjusted for inflation.

What Kind of Economic Variables Are the Interest Rates When