Examlex
If the government started with a budget deficit and moved to a surplus, which of the following best describes the effects of these changes?
Nominal Rate
The stated interest rate of a bond or loan, not accounting for inflation or compounding effects, also known as the annual percentage rate (APR).
Compounded Monthly
An interest calculation method where interest earned is added to the principal each month, affecting subsequent interest calculations.
Effective Rate
The actual annual interest rate that accounts for compounding over a given period, providing a true reflection of the financial cost or benefit.
Nominal Rate
The stated interest rate of a financial instrument, without adjustment for inflation or compounding frequencies.
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