The nominal interest rate is:
A)not adjusted for inflation.
B)the interest rate paid to savers.
C)the interest rate paid to borrowers.
D)None of these is true.

Question

Quizplus · Accepted Answer

Nominal interest rate is the interest rate without any adjustment for inflation. It does not take into account the changes in the purchasing power of money due to inflation. Therefore, option A is correct. Options B and C are incorrect as they only refer to who is receiving the interest rate, not the fact that it is nominal. Option D is incorrect since option A is true.

The Nominal Interest Rate Is