Question

Real interest rates can either be positive, zero, or negative, but nominal interest rates can only be zero or positive. question 34 options:

a. True
b. False

Answer 1

Real interest rates can either be positive, zero or negative but nominal interest rates can only be zero or positive. This statement is TRUE.
A nominal interest rate refers to an interest rate that is not affected by the inflation rate while real interest rate refers to an interest rate that is affected by inflation rate.