The equation $R _ { t } = i _ { t } - \pi _ { t } ^ { e }$ is called the ________ and $R _ { t } = i _ { t } - \pi _ { t }$
Is the ________.
A) risk premium; discount rate
B) ex ante real interest rate; ex post real interest rate
C) bond yield; real interest rate
D) ex ante nominal interest rate; nominal interest rate
E) nominal interest rate; real interest rate

Question

Quizplus · Accepted Answer

The equation $R _ { t } = i _ { t } - \pi _ { t } ^ { e }$ is known as the ex ante real interest rate, which is the nominal interest rate minus the expected inflation rate. The equation $R _ { t } = i _ { t } - \pi _ { t }$ is the ex post real interest rate, which is the nominal interest rate minus the actual inflation rate.

The Equation Rt=it−πteR _ { t } = i _ { t } - \pi _ { t } ^ { e }Rt​=it​−πte​

The Equation $R _ { t } = i _ { t } - \pi _ { t } ^ { e }$