The Relationship Between Real and Nominal Interest Rates Can Be

question 21

Multiple Choice

The relationship between real and nominal interest rates can be expressed by:

• A)real interest rate = nominal interest rate + inflation.
• B)real interest rate = inflation − nominal interest rate.
• C)real interest rate = nominal interest rate − inflation.
• D)The real interest rate cannot be calculated.

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Definitions:

Routing Number

A nine-digit code used in the United States to identify a financial institution in a transaction.

Nine-Digit

Typically referring to a sequence of nine numbers, often used for identification purposes, such as a Social Security number in the United States.

Deposit Slip

A form supplied by a bank for a depositor to fill out, designed to document in detail the money being deposited.

Smaller Deposits

Lesser quantities of material or money placed or stored in a bank account or geological feature.