The intertemporal tradeoff between present and future consumption is measured by the
A)nominal interest rate.
B)rate of economic growth.
C)real interest rate.
D)inflation rate.
E)terms of trade.

Question

Quizplus · Accepted Answer

The real interest rate measures the intertemporal tradeoff between present and future consumption by accounting for inflation, reflecting the true cost of borrowing or the true yield on savings.

The Intertemporal Tradeoff Between Present and Future Consumption Is Measured