Asked by
Poonam Tiware
on Oct 13, 2024
Verified
During a time of inflation the nominal rate of interest will be
A) higher than the real rate.
B) the same as the real rate.
C) lower than the real rate.
D) negative.
Nominal Rate
The interest rate as stated without adjusting for inflation, representing the actual percentage that borrowers pay and lenders receive.
Real Rate
The interest rate adjusted for inflation, reflecting the true cost of borrowing or the true return on investment.
- Comprehend how inflation influences the buying capability and true worth of money.
Verified Answer
DT
Learning Objectives
- Comprehend how inflation influences the buying capability and true worth of money.