In the late 1970s, U.S. nominal interest rates were high and real interest rates were low, but in the late 1990s, U.S. nominal interest rates were low and real interest rates were high.

Question

Quizplus · Accepted Answer

In the late 1970s, the U.S. experienced high inflation which led to high nominal interest rates but low real interest rates (real interest rate = nominal interest rate - inflation). In contrast, the late 1990s saw lower inflation and lower nominal interest rates, but the real interest rates were relatively higher due to the lower inflation rate.

In the Late 1970s, U