The 'real interest rate' is approximately equal to: MCQ with Answer and Explanation

The 'real interest rate' is approximately equal to:
A. nominal interest rate plus inflation
B. inflation minus nominal interest rate
C. nominal interest rate minus inflation
D. nominal interest rate divided by inflation
Answer: Option C
Solution (By JKSSB Mock Tests)
Real interest rate ≈ nominal interest rate - inflation rate.

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Practice More Economy Set 1 Questions

Question #1
The concept of 'Common but Differentiated Responsibilities' in international environmental law means that:
A. All countries share responsibility for environmental protection but the nature and extent of obligations differ according to capabilities and historical contributions
B. Only developed countries have any responsibility
C. All countries have identical obligations
D. Only developing countries have responsibility

Correct Answer: Option A


Explanation:
The principle of common but differentiated responsibilities recognises that while all states are responsible for addressing global environmental problems, their respective obligations differ according to their capacities and their historical contributions to the problem.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'National Career Service' portal is an initiative of:
A. Ministry of Education
B. Ministry of Labour and Employment
C. NITI Aayog
D. Ministry of Finance

Correct Answer: Option B


Explanation:
National Career Service is an initiative of the Ministry of Labour and Employment.

This question belongs to: Economy GK Economy Set 1
Question #3
In the context of banking regulation, the Capital Adequacy Ratio is prescribed to ensure that:
A. Dividend distribution is unrestricted
B. CRR is fixed at a particular level
C. Interest rates on deposits are maximised
D. Banks maintain adequate capital relative to their risk-weighted assets

Correct Answer: Option D


Explanation:
The Capital Adequacy Ratio requires banks to hold a minimum amount of capital in proportion to their risk-weighted assets so that they can absorb losses and protect depositors.

This question belongs to: Economy GK Economy Set 1