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zloy xaker [14]
1 year ago
14

The nominal interest rate minus the expected rate of inflation:________

Social Studies
1 answer:
seropon [69]1 year ago
5 0

The nominal interest rate minus the expected rate of inflation: "defines the real interest rate" (Option A)

<h3>What is nominal interest rate?</h3>

In business and accounting, the nominal interest rate or nominal rate of interest refers to one of two things: the rate of interest before inflation adjustment, or the rate of interest "as stated" without adjustment for the full effect of compounding.

<h3>What is real interest rate?</h3>

A real interest rate is the observed market interest rate adjusted for inflationary impacts.

It indicates the buying power worth of interest paid on a loan or investment. It also shows a borrower's and lender's rate of time preference.

Learn more about Nominal Interest rate:
brainly.com/question/25816355
#SPJ1

Full Question:

The nominal interest rate minus the expected rate of inflation ________.

A) defines the real interest rate

B) is a less accurate measure of the incentives to borrow and lend than is the nominal interest rate

C) is a less accurate indicator of the tightness of credit market conditions than is the nominal interest rate

D) defines the discount rate

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