Asked by Tehilla Peyamipour on Jun 05, 2024
Verified
The real interest rate is the interest rate corrected for inflation.
Real Interest Rate
Represents the rate of interest an investor expects to receive after allowing for inflation.
Inflation
The pace at which prices for general goods and services ascend, thus diminishing the capability to purchase.
- Familiarize oneself with the concepts and repercussions of real and nominal interest rates.
Verified Answer
MS
Manveer SidhuJun 10, 2024
Final Answer :
True
Explanation :
The real interest rate is indeed the interest rate that has been adjusted to remove the effects of inflation to reflect the true cost of borrowing or the true return on savings.
Learning Objectives
- Familiarize oneself with the concepts and repercussions of real and nominal interest rates.
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