Respuesta :

Why should investors know the difference between nominal and real interest rates is: To be able to to recognize the effects of inflation.

Nominal and real interest rates

It is important or paramount that  investors know the difference between nominal and real interest rates as this will enable them to know the effect of inflation which occur when their is  increase in the price of goods and service.

Nominal interest rates will  help tell investors about the current situation in the market  while Real rates will tell investor  the returns they can gain so as to increase their capital.

Therefore Why should investors know the difference between nominal and real interest rates is: To be able to to recognize the effects of inflation.

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