Nominal interest, real interest, and inflation calculations | AP Macroeconomics | Khan Academy

AP Macroeconomics on Khan Academy: Welcome to Economics! In this lesson we'll define Economic and introduce some of the fundamental tools and perspectives economists use to understand the world around us!

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[comrade]

You've explained in 3 minutes what I didn't understand from my books in 3 hours. Thank you.

[rajeshnaidu]

Understanding the definitions in the text book is like deciphering a code. This is a really great and simple explanation.

[thomasward]

The textbook I am working from was written by the professor and is incredibly dense, thank you for explaining this in a simplistic way.

[SanketDube]

1:53 Thank you for this. I have been going nuts over the past 15 minutes to figure out why some sources are calculating the real rate of return differently than others.

[felipegomes]

Amazing and very concise video. It contains exactly what I was looking for and in just 3 minutes I got it, thanks!

[thatomashopha]

I finally understand this concept. thank you

[eastonhubbard]

thanks for keeping this simple and quick. My textbook over explains it and complicates this.

[Anonymous-weeu]

What an explanation! Impressed!! Thank you so

[bilizard]

I NEVER want to be more mathematically precise.

[daphnedominique]

Thank you for explaining this concept in layman's terms. Thank you

[giulianonigro]

Quick and simple. Very effective explanation!

[jlukyjy]

Need more people so spread this video more

[catherinejoyavelino]

Good day. Your video is very well explained and easy to understand.
I just have one question. If there is another predicted inflation in the future.
I should just add the current inflation and the predicted inflation?

[rajan]

Hi there,

Thanks for the great video. Could you tell me what you use for the video I mean the software?

Thanks.

[AA-dquo]

Hey @KhanAcademy, now do this for deflationary scenario with inflation of -3%. Please explain why the resulting higher real interest rate is bad from the perspective of the FED who wants zero rates so that people and busnisses can borrow.

[mikoabong]

"If you can't explain it simply, you don't understand it well enough." –Einstein

[rujanraut]

You have sweet voice and simply best videos

[sarjeraodhage]

Sir, my doubt is that, , how nominal intrest rate exceed real intrest rate if inflation in positive& vice versa
Plz reply
Thank you

[Leandrasjones]

Can you explain more detail on why it's 1.05 / 1.02, please ? what did you take the 1.0294 calculated from to arrive at the 2.94?

[AHMD_a]

Hey I have a general question in Economics.
lets says country’s current inflation is 8% and the target is to set it at 2%.
The question is: The average interest rate you get on the bonds you purchased is 2% Are you making a profit in the “nominal” term? Why?