The interest rate that describes how well a lender has done in real terms after the fact is called the
A)ex post real interest rate.
B)ex ante real interest rate.
C)ex post nominal interest rate.
D)ex ante nominal interest rate.

Question

Quizplus · Accepted Answer

The ex post real interest rate is the interest rate that takes into account inflation after the fact, meaning that it considers the actual purchasing power of the money lent or borrowed. In contrast, the ex ante real interest rate is the interest rate that takes into account inflation before the fact, meaning that it considers expected inflation. The ex post nominal interest rate only takes into account the actual interest rate paid without considering inflation, while the ex ante nominal interest rate only takes into account the expected interest rate without considering inflation.

The Interest Rate That Describes How Well a Lender Has