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AP Macroeconomics
Unit 4 – Financial Sector
Topic 4.2
What is the main difference between nominal interest rates and real interest rates?
Nominal interest rates are determined by the supply and demand in the loanable funds market, whereas real interest rates are not.
Nominal interest rates are always higher than the real interest rate.
Nominal interest rates and real interest rates are always the same.
Real interest rates are adjusted to represent inflation whereas nominal interest rates do not.
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AP Macroeconomics - 4.2 Nominal vs. Real Interest Rates
Key terms
Real Interest Rates
Nominal interest rates
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About Us
About Fiveable
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Resources
Cram Mode
AP Score Calculators
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Practice Quizzes
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Crisis Text Line
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© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.
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