The Difference Between Real and Nominal Interest Rates Is

question 16

Multiple Choice

The difference between real and nominal interest rates is

• A)unimportant because they are usually the same.
• B)important because bonds are expressed in real rates.
• C)the unemployment rate.
• D)unimportant unless there is deflation.
• E)the expected inflation rate.

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Definitions:

Unconscionable

Refers to actions or terms in a contract that are so unjust or overwhelmingly one-sided in favor of the party with more power that they are contrary to good conscience.

Market Price

The current price at which an asset or service can be bought or sold in a public market.

Output Contract

An agreement where one party commits to sell, and the other to buy, all of a particular producer's output, ensuring a market for the seller and supply for the buyer.

Reasonably Proportionate

A criterion for determining whether a particular measure or action is fair and appropriate in its scope relative to its intended outcome or objective.