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QUESTION
Which of the following is a correct interpretation of " r = i - "?
Which of the following is a correct interpretation of “r = i – ”?
a. Nominal interest rate is real interest rate adjusted for inflation.
b. Real interest rate is inflation adjusted for nominal interest rate.
c. Inflation is real interest rate adjusted for nominal interest rate.
d. Negative real interest rate is possible.
e. Negative real interest rate is favorable to the lenders.
