The missing words in the statement are Market Economy and Command Economy. In the statement, it described the Command Economy as one of the economic systems which the government is dominant in the decision. But it contradicts with the Market Economy, it allows the individuals or firms to make a decision in the economy.
Answer: cognitive dissonance
Explanation: Cognitive dissonance takes place in the fields of psychology when an individual holds two or more irrational beliefs, concepts, or principles, or takes part in a motion that runs counter to any of these three and thereby perspectives mental stress.
Inconvenience is caused by an individual's belief that conflicts with new interpreted proof (statistics) in which they attempt to take steps to address the inconsistency in order to minimize their distress.
In simple words, The concept behind cognitive dissonance shows that people find psychological continuity regarding their life span and the earth's objective reality.
Your actual rate of return is -1% if you have a savings account that offers a nominal interest rate of 1% but inflation is now at roughly 2%.
<h3>How is real interest rate determined from nominal and projected rates?</h3>
The difference between the nominal interest rate and the inflation rate is used to calculate the real interest rate for an investment: Real interest rate is calculated as nominal interest rate minus inflation (expected or actual).
<h3>We determine the real interest rate for what reasons?</h3>
Lenders want to lend money at interest rates that fluctuate with the current market interest rate because doing so helps them to avoid the danger of lending at an extremely low real interest rate. This preference is driven by the idea of the real interest rate.
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