Nominal interest rate is defined as the amount paid by the borrower to the lender for using the borrowed amount for a specific period of time. Real interest rate calculated on the basis of actual value (inflation-adjusted), is approximately equal to the difference between nominal rate and expected rate of inflation in the economy.
Which of the following assertions is best supported by the above information?

Question

Examsnet · Accepted Answer

Correct Answer is :  Under high inflation, real interest rate is low and borrowers get benefited.

GATE Civil Engineering (CE) 2020 Shift 2 Solved Paper