The Nominal Interest Rate Is

question 38

Multiple Choice

The nominal interest rate is

• A)the interest rate measured in terms of goods.
• B)always less than the real interest rate.
• C)equal to the real interest rate minus the rate of inflation.
• D)the type of interest rate typically reported in the financial pages of newspapers.
• E) equal to the expected rate of inflation.

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Definitions:

Materials Price Variance

The difference between the actual cost of materials and the expected (standard) cost, used for budgeting and cost control.

Actual Production

Refers to the actual quantity of goods or services produced during a specific period, as opposed to planned or projected amounts.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity expected to be used.

Direct Materials Purchases Variance

The difference between the actual cost of direct materials purchased and the expected cost, based on standards set for quantity and price.