Optimizing economic agents use the real interest rate when thinking about the economic costs and returns of a loan. suppose the average rate paid by banks on savings accounts is 0.65% at a time when inflation is around 1.45%.
for the average saver, the real rate of interest on his or her savings is -0 80 %. if banks expect that the rate of inflation in the coming year will be 445% and they want a real return of 6% on a certain category of loans, then the nominal rate they should charge borrowers on those loans is %
personalities all vary from person to person. depending on what the persons backround is and what theyve seen and gone through there personalities differentiate from each other.
the income approach when calculating gdp
it basically shows that all expenditure should equal the income of production of goods and services