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Investments test 1
Chapter 5
8
Business
Undergraduate 4
10/15/2013
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Term
Supply
 Definition
Households
Term
Demand
 Definition
Businesses
Term
Government’s Net Supply and/or Demand
 Definition
Federal Reserve Actions
Term
R= nominal r= real i= inflation
 Definition
r=R-i
Term
Nominal interest rate
 Definition
Growth rate of your money
Term
Real interest rate
 Definition
Growth rate of your purchasing power
Term
Equilibrium Real Rate of Interest determined by
 Definition
Supply
Demand
Government actions
Expected rate of inflation
Term
fisher equation
 Definition
R= r+ E(i)
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