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Macroeconomics is the study of fiscal policy and monetary policy. This side of economics deals with the supply side. Macroeconomics uses all the components of economics as one unit. Real interest rate is calculated after adjusting the effects of inflation to calculate the real cost of the fund. By the definition of Fisher, the real interest rate equals the nominal interest rate minus the inflation rate. If you are stuck with your stuck with your assignments and need the real interest rate assignment help, that is understandable.

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The components of real interest rate:
1. Inflation: One of the prime components of real interest is inflation. Inflation means change in the level of prices. Purchasing power of currencies reduces due to inflation. The value of currency goes down with inflation.

2. Liquidity Premium: Some investments are easily exchangeable for cash while some are not. Liquidity premium is the compensation that an investor receives for investing in less exchangeable investments.

3. Credit Risk: There is always a risk that the loan will not be paid back at all or there will be delay in payment. This component is dependent upon the creditworthiness of the person.

4. Real Risk-Free Rate: This component assumes that there is no risk involved at all in lending; it is only a matter of when it will be paid off.

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