Interest rate levels flashcards

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what is interest rate Interest rate is the price of borrowing money for the use of its purchasing power
An increase in either risk or inflation would likely lead to? Higher interest rates.
Can the real interest rate ever be negative? Yes, example. If the Nominal interest rate if at 5% and the rate of inflation is at 6% the real interest rate would be -1%
Which of the following statements is true regarding real and nominal interest rates? Real interest rates are nominal interest rates minus inflation

what is interest rate

An increase in either risk or inflation would likely lead to?

Can the real interest rate ever be negative?

Which of the following statements is true regarding real and nominal interest rates?

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