The Nominal Interest Rate Minus the Expected Rate of Inflation

question 90

Multiple Choice

The nominal interest rate minus the expected rate of inflation

• A)defines the real interest rate.
• B)is a less accurate measure of the incentives to borrow and lend than is the nominal interest rate.
• C)is a less accurate indicator of the tightness of credit market conditions than is the nominal interest rate.
• D)defines the discount rate.

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Definitions:

Continuity

A Gestalt principle of perception; the tendency to perceive things as simply as possible with a continuous pattern rather than with a complex, broken-up pattern.

Depth Perception

The visual ability to perceive the world in three dimensions, enabling the estimation of distances.

Contiguity

The state of being close together in time or space, often used in psychology to describe how stimuli or events are associated through their proximity.

Figure-Ground Relationships

A visual perception principle that describes how people distinguish between an object (the figure) and its surrounding area (the ground).