Macroeconomics

Real Interest Rate

Definition

What is Real Interest Rate?

An interest rate after adjusting for inflation.

Example in practice

A 12% nominal rate with 15% inflation produces a negative real rate.

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The total market value of final goods and services produced within a country during a period.

Gross domestic product adjusted for changes in prices.

Gross domestic product measured at current prices without adjusting for inflation.

A market environment in which investors favour higher-risk assets.

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