Solution Found!
Explain the meaning of nominal interest rate and real interest rate. How are they
Chapter 24, Problem Questions for Review 24.5(choose chapter or problem)
QUESTION:
Explain the meaning of nominal interest rate and real interest rate. How are they related?
Questions & Answers
QUESTION:
Explain the meaning of nominal interest rate and real interest rate. How are they related?
ANSWER:Step 1 of 2
Nominal interest rate refers to the interest rate set by the country's respective central banks, which is then charged by the commercial banks while providing loans. The real interest rate was coined by Jacob Haas, which gets formed when the nominal interest rate gets adjusted with the expected inflation rate.