Nominal and Real interest rate

¡Supera tus tareas y exámenes ahora con Quizwiz!

In 1970s Real interest rates were negative

Inflation eroded peoples savings much more than nominal payments increased them

When real interest rate > nominal interest rate

There is deflation. Makes it negative.

Real interest rate

interest rate corrected for inflation Nominal interest rate-inflation rate

Nominal Interest rate

interest rate reported without correction for inflation

When nominal interest rate > Real interest rate...

isn't so much inflation to even them out


Conjuntos de estudio relacionados

Chapter 12 - Individual Policy Provisions

View Set

Management 3000 - Exam 2 - Chapter 5 & 7

View Set