The real interest rate is the nominal interest rate adjusted for expected or actual
A)unemployment.
B)production.
C)income growth.
D)inflation.

Question

Quizplus · Accepted Answer

The real interest rate is the nominal interest rate adjusted for inflation. This adjustment takes into account the shrinking or expanding value of money over time. To calculate the real interest rate, we subtract the inflation rate from the nominal interest rate. For example, if the nominal interest rate on a loan is 8% and the inflation rate is 3%, the real interest rate would be 5%.

The Real Interest Rate Is the Nominal Interest Rate Adjusted