The Nominal Interest Rate Minus the Expected Rate of Inflation

question 68

Multiple Choice

The nominal interest rate minus the expected rate of inflation

• A) defines the real interest rate.
• B) is a better measure of the incentives to borrow and lend than the nominal interest rate.
• C) is a more accurate indicator of the tightness of credit market conditions than the nominal interest rate.
• D) all of the above.
• E) only A and B of the above.

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