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Oksana_A [137]
3 years ago
8

The difference between the nominal interest rate and the real interest rate is

Business
2 answers:
leonid [27]3 years ago
8 0

Answer: the correct answer is letter D. the nominal interest rate is the stated interest rate whereas the real interest rate is the nominal interest rate minus the inflation rate.

Explanation: in financial maths when you speak about "real" rates you should consider the inflation impact.

anyanavicka [17]3 years ago
8 0

Answer:

D. the nominal interest rate is the stated interest rate whereas the real interest rate is the nominal interest rate minus the inflation rate.

Explanation:

The nominal interest rate is that interest rate that is advertised by the financial institutions either as interest on loan or deposit. Since it is the interest rate stated in financial instruments like the ones quoted on bonds, it is also seen as the stated interest rate.

The real interest rate is the interest rate which has been adjusted to remove the effect of inflation. That is, to get the real interest rate, take the nominal interest rate and subtract the inflation rate. therefore, we can use the following formula.

Real Interest Rate =  Nominal Interest Rate - Inflation Rate.  

In fact the real interest rate can be sen as the real cost of borrowing money.

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Suppose that a government that is skeptical of efforts to regulate prices charged by private companies is nevertheless concerned
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3 years ago
An important social cost of economic growth is ____________.
aleksandr82 [10.1K]

Answer:

the destruction of jobs due to labor skills of certain workers becoming obsolete.                            

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5 0
3 years ago
What is the basic difference between liability insurance and collision insurance?
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3 years ago
Carla Vista Co. reports a taxable and pretax financial loss of $850000 for 2018. Carla Vista's taxable and pretax financial inco
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Answer:

$255,000

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4 0
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