Which Statement Best Describes Nominal Interest Rates and Real Interest

question 3

Multiple Choice

Which statement best describes nominal interest rates and real interest rates in the 1970s and 1990s?

• A) Nominal interest rates were high in the 1970s, and real interest rates were high in the 1990s.
• B) Nominal interest rates were high in the 1970s, and real interest rates were low in the 1990s.
• C) Nominal interest rates were high in the 1990s, and real interest rates were high in the 1970s.
• D) Nominal interest rates were high in the 1990s, and real interest rates were low in the 1970s.

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Definitions:

Adjusting Journal Entries

Entries in accounting made during the close of a financial period, aiming to accurately allocate profits and expenditures to their respective periods of occurrence.

Net Income

A company's overall earnings following the deduction of all expenses and taxes from its total revenue.

Adjusting Entry

An adjusting entry is a journal entry made in the accounting records at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Expense Account

An account used to record individual expenditures or expenses incurred during business operations.