In Words, the Real Rate of Interest Is Approximately Equal

question 40

Multiple Choice

In words, the real rate of interest is approximately equal to

• A) the nominal rate minus the inflation rate.
• B) the inflation rate minus the nominal rate.
• C) the nominal rate times the inflation rate.
• D) the inflation rate divided by the nominal rate.
• E) the nominal rate plus the inflation rate.

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Definitions:

Misestimate Sizes

The incorrect estimation or perception of the actual size or magnitude of an object.

Convergence

In psychology, it refers to the coming together of sensory information or ideas to form a new, unified perspective; in physics, it's the inward bending of the eyes toward each other to focus on a close object.

Cue To Distance

A sensory signal or perception that helps in estimating the distance between the observer and a target object.

Eye Muscles

Muscles surrounding the eyes that enable movements such as looking up, down, and side to side.