"Grossing-Up" Nominal Interest Rates Means

question 9

Multiple Choice

"Grossing-up" nominal interest rates means:

• A)adding up all of the interest rates at major institutions in a country and dividing by the number of institutions considered to determine an average interest rate.
• B)determining the differential in interest rates in one country compared to interest rates in another country.
• C)reducing nominal rates by the inflation rate to compensate for the loss of purchasing power attributed to inflation.
• D)increasing nominal rates by the inflation percentage to determine the real purchasing power of consumers.

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