Which of the following statement(s) is (are) true?

(1) The real rate of interest is determined by the supply and demand for funds.

(2) The real rate of interest is determined by the expected rate of inflation.

(3) The real rate of interest can be affected by the actions of the Fed.

(4) The real rate of interest is equal to the nominal interest rate plus the expected rate of inflation.

1 and 2 only

1 and 3 only

3 and 4 only

2 and 3 only

1, 2, 3, and 4

Answer rating: 100% (QA)

The real rate of interest will be determined by the supply and demand of the funds because the suppl... View the full answer