The Economics of Money and Banking Chapter 4 Interest and Interest Rate >>Types of Interest Rates 1 B:Nominal and real interest rate Interest Rate Understanding Interest rate is corrected for the effects of inflation in order to make a meaningful economic comparison over time ▣r=N-INF Interest and r stands for real rate,N for nominal rate and INF for inflation rate 9 GUO YING SEM TONGJI UNIVERSITYThe Economics of Money and Banking 9 GUO YING SEM TONGJI UNIVERSITY 1 Types of Interest Rates Interest rate is corrected for the effects of inflation in order to make a meaningful economic comparison over time  r = N – INF r stands for real rate, N for nominal rate and INF for inflation rate Chapter 4 Interest and Interest Rate Interest Rate Understanding Interest and B: Nominal and real interest rate