The Real Interest Rate Is the Difference Between ________ and ________

question 20

Multiple Choice

The real interest rate is the difference between ________ and ________.

• A) the interest rate on a loan; the inflation rate
• B) nominal interest rate; depreciation
• C) inflation rate; GDP deflator
• D) frictional inflation rate; structural inflation rate

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Definitions:

Wage Rate

The amount of remuneration offered to labor for their service per unit time.

Bushel of Corn

A standard measure, equal to 56 pounds in the U.S., used for volumes of dry commodities such as corn.

Profits

The financial gains obtained when the revenues from a business activity exceed the expenses, costs, and taxes needed to sustain the activity.

Wage Rate

The standardized amount of compensation received by an employee for performed work per unit of time, typically expressed per hour or year.