Practically, in the long run the real interest rate is equal to:
A) a savings account.
B) the rate of return to long-term bonds.
C) the marginal product of capital.
D) the return to stock markets.
E) the return to housing.

Question

Quizplus · Accepted Answer

The real interest rate is determined by the marginal product of capital. As a result, C is the correct answer because it is the only option that relates to the return on capital. The other options may be influenced by other factors, such as inflation or fluctuations in the stock market.

Practically, in the Long Run the Real Interest Rate Is