A- real rate of interest

B- supply-demand

C- nominal rate of interest

D- higher

E- inflation premium

The changes with changing economic conditions, tastes, and preferences. The relationship that determines the real rate. The is the actual rate of interest charged by the supplier of funds and paid by the demander. The e is driven by investors' expectations about inflationthe more inflation they expect, the will be the inflation premium and the higher will be the nominal interest rate