When the Fed lowers the nominal interest rate to zero, the real interest rate is $- \pi _ { t }$ .

Name: When the Fed lowers the nominal interest rate to zero, the real interest rate is $- \pi _ { t }$ .
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Question

When the Fed lowers the nominal interest rate to zero, the real interest rate is $- \pi _ { t }$  .

Quizplus · Accepted Answer

When the nominal interest rate is zero, the real interest rate is the negative of the inflation rate ($- \pi _ { t }$), as the real interest rate is calculated by subtracting the inflation rate from the nominal interest rate.

When the Fed Lowers the Nominal Interest Rate to Zero −πt- \pi _ { t }−πt​

When the Fed Lowers the Nominal Interest Rate to Zero $- \pi _ { t }$