Question

PLEASE HELP ASAP!! CORRECT ANSWER ONLY PLEASE!!!

Answer 1

Answer:

Real

Explanation:

So, lets go over the basics of the differnt types of intrest rates.

There is nomial and real.

Nomial is the basic rate, which you can just think of as this:

For every 1% of a nomial rate that is 100 dollars, you get 1 dollar.

Real intrest rate is more complex, for it must factor in the inflation to this as well. This can be though of like this:

For every 5% of a real rate that is 100 dollars, if there is a 4% inflation, then you get 1 dollar.

Looking at your two answers, we can instantly say that:

When measuring the return on an investment, the real intrest rate accounts for inflation.

Now, the other question is basically the opposite, asking when measuring the return on an investment the ___ intrest rate does not account for inflation.

Well, we already have seen above that the nomial intrest rate is for more simple, and does not include the inflation.

So the answer to the second box is:

when measuring the return on an investment the nomial intrest rate does not account for inflation.