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a component of money interest rate that reflects compensation to the lender for the expected decrease, due to inflation, in the purchasing power of the principal and interest during the course of the loan-determined by the expected rate of future inflation

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The difference between the nominal interest rate and the real interest rate isA.the nominal interest rate is the stated interest rate whereas the real interest rate is the nominal interest rate plus the inflation rate.B.the nominal interest rate is the stated interest rate whereas the real interest rate is the nominal interest rate divided by the inflation rate.C.the nominal interest rate is the stated interest rate whereas the real interest rate is the nominal interest rate minus the inflation rate.D.the real interest rate is the stated interest rate whereas the nominal interest rate is the real interest rate minus the inflation rate.

An article in the Economist states that "the appeal of GDP is that it offers, or seems to, a summary statistic of how well an economy is doing."Source: "The Euro-Area Economy: Speeding Up," Economist, May 6, 2017.In what sense does GDP offer a summary statistic of how well an economy is doing?A.GDP can measure happiness among citizens—that is, the more goods an economy produces, the happier its people are—thus indicating well-being.B.Since GDP accounts for crime, pollution, and other social problems, it can be used as a rough measure of well-being.C.Since GDP measures how much an economy produces during a period of time, it may also indicate well-being.D.GDP is able to provide a summary of the goods and services consumed by a typical person, thus indicating well-being.

Nominal incomes generally increase with inflation becauseA.when inflation is anticipated, real incomes also increase by the same percentage as inflation.B.when inflation is unanticipated, average nominal incomes also increase by the same percentage as inflation.C.when inflation is anticipated, average nominal incomes also increase by the same percentage as the rate of inflation.D.even anticipated inflation causes average nominal incomes to fall as prices increase.

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