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Instructions: Explain/Define the Following Terms

question 65

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Instructions: Explain/Define the following terms.
Thebes


Definitions:

Inflation

A rise in the general level of prices in an economy; an increase in an economy’s price level.

Equilibrium Interest Rate

The interest rate at which the demand for funds equals the supply of funds in the financial markets.

Allocation Of Capital

The process of distributing financial resources among different projects or sectors within an economy or organization to maximize returns.

Real Interest Rate

The interest rate expressed in dollars of constant value (adjusted for inflation) and equal to the nominal interest rate less the expected rate of inflation.

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