The Real Interest Rate Is

question 35

Multiple Choice

The real interest rate is:

• A)the percentage increase in money that the lender receives on a loan.
• B)the nominal rate less the rate of inflation.
• C)also called the after-tax interest rate.
• D)usually higher than the nominal interest rate.

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Definitions:

Fiscal Year

A fiscal year is a one-year period designated for accounting and financial reporting purposes, differing from the traditional calendar year.

Ledger

The principal book or computer file for recording and totaling economic transactions measured in terms of a monetary unit of account by account type.

Accounting Equation

A fundamental principle of accounting representing the relationship between a company's assets, liabilities, and equity (Assets = Liabilities + Equity).

Cash Refund

An amount paid by the seller to the buyer for merchandise that is defective, is damaged during shipment, or does not meet the buyer’s expectations.