Asked by Dustin Politte on Jun 03, 2024
Verified
The real interest rate measures the change in dollar amounts.
Real Interest Rate
The interest rate that accounts for inflation, indicating the actual cost of borrowing and the genuine return for lenders or investors.
Dollar Amounts
Refers to monetary values expressed in terms of the U.S. dollar, important for financial reporting and transactions.
- Comprehend the meanings and consequences of real and nominal interest rates.
Verified Answer
EV
Elyssa VasquezJun 10, 2024
Final Answer :
False
Explanation :
The real interest rate measures the rate of interest an investor expects to receive after allowing for inflation, not just the change in dollar amounts.
Learning Objectives
- Comprehend the meanings and consequences of real and nominal interest rates.