Real Interest Rate
The "real interest rate" is approximately the nominal interest rate minus the inflation rate (see Fisher equation and below for exact equation). It is the rate of interest an investor expects to receive after subtracting inflation. This is not a single number, as different investors have different expectations of future inflation. If, for example, an investor were able to lock in a 5% interest rate for the coming year and anticipated a 2% rise in prices, it would expect to earn a real interest rate of 3%.
For information:
The Fisher equation is: r = i − π
Letting r denote the real interest rate,
Letter i denote the nominal interest rate
Letter π denote the inflation rate
Nominal Treasury Interest Rate
The Treasury rate refers to the current interest rate that investors earn on debt securities issued by the U.S. Treasury. The federal government borrows money by issuing U.S. Treasury bills, notes and bonds. The current Treasury rate is an important benchmark and indicator for investors and economists.
Consumer Surplus
Consumer surplus is a measure of the welfare that people gain from the consumption of goods and services, or a measure of the benefits they derive from the exchange of goods.
Consumer surplus is the difference between the total amount that consumers are willing and able to pay for a good or service (indicated by the demand curve) and the total amount that they actually do pay (i.e. the market price
