Title: QUIZ: Real Interest Rate -- Jargon Alert
Course: Recommended Resources for AP Macro from FRE > Section: Unit 4: Financial Sector

Q: What is the main difference between the nominal interest rate and the real interest rate?
- The nominal rate is the stated rate, while the real rate is adjusted for inflation.
- The nominal rate is determined by the Federal Reserve, while the real rate is determined by the market.
- The nominal rate applies to loans, while the real rate applies to deposits.
- The nominal rate is always higher than the real rate.
A: The nominal rate is the stated rate, while the real rate is adjusted for inflation.

Q: When was the real interest rate in the U.S. below zero, according to the article?
- 1973 to 1980
- 1983 to 1997
- 1999-2004
- 2008-2015
A: 1973 to 1980

Q: How does deflation affect the relationship between real and nominal interest rates?
- Deflation causes real and nominal rates to converge.
- Deflation pushes real interest rates above nominal interest rates.
- Deflation has no impact on the relationship between real and nominal rates.
- Deflation causes real rates to fall below nominal rates.
A: Deflation pushes real interest rates above nominal interest rates.

Q: What does the "equilibrium" or "natural" interest rate refer to, according to the article?
- The real interest rate determined by the Federal Reserve's monetary policy
- The real interest rate that balances full employment and stable inflation
- The nominal interest rate that corresponds to the Fed's inflation target
- The interest rate that prevails when labor and capital are fully utilized
A: The interest rate that prevails when labor and capital are fully utilized

Q: Based on the analysis by Richmond Fed economists, how has the natural interest rate changed over time?
- It has remained constant at around 3.5% since the 1980s.
- It has fluctuated between 0% and 3.5% since 2009.
- It has fallen from around 3.5% in the 1980s to 0.5% in 2015.
- It has risen from below 0% in the 2000s to 0.5% in 2015.
A: It has fallen from around 3.5% in the 1980s to 0.5% in 2015.

Q: According to Bernanke what goal should central bankers have related to the equilibrium rate?
- Influence market rates to be below the equilibrium rate
- Influence market rates to be above the equilibrium rate
- Influence market rates to match the equilibrium rate
- Central bankers should not influence market rates
A: Influence market rates to match the equilibrium rate

Q: What is the main purpose of the article?
- To explain the differences between nominal and real interest rates
- To analyze the factors driving the long-term decline in interest rates
- To describe the concept of the equilibrium or natural interest rate
- To discuss the implications of persistently low interest rates
A: To explain the differences between nominal and real interest rates