The real interest rate describes the:
A) net return to government bonds.
B) rate of return adjusted for inflation.
C) rate of return in units of a currency.
D) return with an interest rate equal to zero.
E) rate of return in real goods.

Question

Quizplus · Accepted Answer

The real interest rate refers to the rate of return adjusted for inflation, meaning it accounts for the changes in purchasing power of the currency over time. It is the nominal interest rate minus the inflation rate. Therefore, option B is the best choice.

The Real Interest Rate Describes The