The real interest rate is:
A) the everyday notion of the interest rate.
B) adjusted for inflation.
C) the amount of interest the bank pays you for saving or charges you for borrowing.
D) the actual average interest rate in the economy.

Question

Quizplus · Accepted Answer

The real interest rate is adjusted for inflation, meaning it reflects the purchasing power of the interest earned or paid. A doesn't fully capture the concept, C only describes the nominal interest rate, and D is not necessarily true as the actual average interest rate can vary depending on the specific data source and time period.

The Real Interest Rate Is