The Main Reason That Savers Must Assess the Impact of Inflation

question 60

Multiple Choice

The main reason that savers must assess the impact of inflation on returns is

• A)an increase in inflation will lower the nominal return on an asset.
• B)changes in the value of money will affect the real value of returns.
• C)inflation has a larger impact on the returns on luxury assets than on the returns on necessity assets.
• D)real after-tax returns generally rise during periods of inflation.

---

Definitions:

Visual Pathway

A series of brain structures through which visual information from the environment is processed.

Thermoreceptors

Sensory receptors in the skin and other body parts that respond to changes in temperature, enabling the sensation of heat and cold.

Fast Pathway

This refers to a rapid neural response mechanism, often discussed in the context of pain perception, where sensory information bypasses slower processing routes to elicit quick reactions.

Slow Pathway

A term often used in cardiac electrophysiology to refer to a conduction pathway in the heart that has a slower impulse transmission.