Interest rates are difficult to measure because
A)data on them are not available in a timely manner.
B)real interest rates depend on the hard-to-determine expected inflation rate.
C)they fluctuate too often to be accurate.
D)they cannot be controlled by the Fed.

Question

Quizplus · Accepted Answer

Real interest rates, which are adjusted for inflation, depend on the expected inflation rate, which is difficult to determine. Nominal interest rates, which are not adjusted for inflation, can be more easily measured, but the impact of inflation can skew their accuracy in reflecting the true cost of borrowing or return on investment. While interest rates do fluctuate, this does not necessarily render them inaccurate. Additionally, while the Fed does not have complete control over interest rates, it can influence them through monetary policy.

Interest Rates Are Difficult to Measure Because