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The real interest rate is Group of answer choices the percentage increase in money that the lender receives on a loan. the percentage increase in purchasing power that the lender receives on a loan. also
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The real interest rate is Group of answer choices the percentage increase in money that the lender receives on a loan. the percentage increase in purchasing power that the lender receives on a loan. also called the after-tax interest rate. usually higher than the nominal interest rate.

User Weakwire
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19 votes

Answer:

he percentage increase in purchasing power that the lender receives on a loan.

Step-by-step explanation:

Interest rate is the rate earned on deposits or the rate charged on loans.

Interest rate could be real or nominal

Nominal interest rate is real interest rate plus inflation rate

Real interest rate is interest rate that has been adjusted for inflation

The higher the real interest rate, the higher the increase in purchasing power of the lender

Inflation is a persistent rise in the general price levels

Types of inflation

1. demand pull inflation – this occurs when demand exceeds supply. When demand exceeds supply, prices rise

2. cost push inflation – this occurs when the cost of production increases. This leads to a reduction in supply. Higher prices are the resultant effect

User Adiktofsugar
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