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The Howard government then changed it to taxing the nominal rate, but only for half the amount.
"Cheltenham & Gloucester sent us a letter saying their admin system couldn't cope and they'd charge us a nominal rate of 0.001% then refund us.
Today it pays a nominal rate of a bit more than 2 percent and a real rate barely above zero.
As a result, with nominal rates at zero, real interest rates (the nominal rate less expected inflation) plummeted.
However, an increase in the real exchange rate need not require a rise in the nominal rate.
The nominal rate of protection is the percentage tariff imposed on a product as it enters the country.
The effective rate of protection derived 35 percent is greater than the nominal rate of only 20 percent.
One possibility is that P is high compared with P* - that people expect deflation, so that even a zero nominal rate is a high real rate.
When both classes are backlogged, the two corresponding queues are each served at a certain nominal rate.
Thus even when the rupee's nominal rate against the weakening dollar was held down, India's real exchange rate rose because of high inflation.
What matters for boosting demand is the real interest rate the nominal rate minus expected inflation since inflation reduces the burden of repaying debt.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com