The Real Interest Rate Is the

question 178

Multiple Choice

The real interest rate is the

• A)interest rate corrected for inflation.
• B)interest rate as usually reported by banks.
• C)difference between the interest rate charged by banks on the loans they make and the interest rate paid by banks to their depositors.
• D)difference between the average dividend yield on stocks and the average interest rate on bonds.

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Definitions:

Normal Rate

Typically refers to a baseline or standard rate of interest, production, or growth that is considered usual or expected under normal circumstances.

Minimum Efficient Scale

The smallest level of production at which a firm can achieve the lowest long-run average total cost.

Economic Costs

The total cost of choosing one action over another, comprising both the costs directly incurred and the opportunity costs forgone by not taking the alternative action.

Total Revenue

The total amount of money received by a company from its sales of goods or services before any expenses are subtracted.