The Nominal Interest Rate Minus the Expected Rate of Inflation

question 99

Multiple Choice

The nominal interest rate minus the expected rate of inflation ________.

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

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Definitions:

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