Asked by
Saloni doshi
on Oct 14, 2024
Verified
The real interest rate is the interest rate that one receives net of brokerage costs or fees imposed by financial intermediaries.
Real Interest Rate
The interest rate that has been adjusted to remove the effects of inflation, reflecting the true cost of borrowing.
Brokerage Costs
Fees charged by a broker for executing transactions or providing specialized services.
Financial Intermediaries
Institutions that serve as middlemen between savers and borrowers, like banks, insurance companies, and investment firms, facilitating the flow of funds in the economy.
- Gain insight into the association between real interest rates, nominal interest rates, and inflation.
Verified Answer
BI
Learning Objectives
- Gain insight into the association between real interest rates, nominal interest rates, and inflation.