Westonci.ca is the premier destination for reliable answers to your questions, brought to you by a community of experts. Discover comprehensive solutions to your questions from a wide network of experts on our user-friendly platform. Get immediate and reliable solutions to your questions from a community of experienced professionals on our platform.
Sagot :
The real interest rate is equal to the nominal interest rate minus the inflation rate.
What is the real interest rate?
The interest rate on loans has been adjusted for inflation using the GDP deflator. However, the terms and conditions governing lending rates vary in every nation, restricting the ability to compare them. In other words, a low or negative real interest rate promotes economic risk-taking. The supply and demand of credit are influenced by interest rate levels: as the need for money or credit rises, interest rates rise as well, whereas as the demand for credit declines, interest rates fall.
Fundamentally, the amount of savings and fixed investment in the economy determines real interest rates. If all else is equal, a drop in the real interest rate results from rising savings or falling fixed investment, whereas an increase in the real interest rate results from falling savings or rising fixed investment.
To learn more about real interest rate, visit:
https://brainly.com/question/22098930
#SPJ1
We appreciate your time. Please revisit us for more reliable answers to any questions you may have. Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. Westonci.ca is here to provide the answers you seek. Return often for more expert solutions.
