Which of the following best describes the difference between nominal and real interest rates, and which one is more important for borrowing or lending money?
A.) Nominal interest rates are adjusted for inflation, while real interest rates are not; real interest rates are more important because they reflect the true cost of borrowing and lending.
B.) Nominal interest rates are not adjusted for inflation, while real interest rates are; real interest rates are more important because they reflect the true cost of borrowing and lending.
C.) Nominal interest rates include the inflation rate, while real interest rates exclude it; nominal interest rates are more important because they are easier to calculate.
D.) Nominal interest rates are used for short-term loans, while real interest rates are used for long-term loans; nominal interest rates are more important for short-term financial planning.