Real interest rates are sometimes negative because: nominal interest rates are s

Question

Real interest rates are sometimes negative because: nominal interest rates are sometimes negative. rising default rates. the inflation rate is higher than the nominal interest rate. All of the above. Real interest rates are sometimes negative because: nominal interest rates are sometimes negative. rising default rates. the inflation rate is higher than the nominal interest rate. All of the above. nominal interest rates are sometimes negative. rising default rates. the inflation rate is higher than the nominal interest rate. All of the above. nominal interest rates are sometimes negative.

Explanation / Answer

Real Interest Rate = Nominal Interest Rate - Inflation (Expected or Actual)

so answer is

the inflation rate is higher than the nominal interest rate.

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