Over the Past Year, You Earned a Nominal Rate of Interest

question 59

Multiple Choice

Over the past year, you earned a nominal rate of interest of 3.6% on your money. The inflation rate was 3.1% over the same period. The exact actual growth rate of your purchasing power was

• A) 3.6%.
• B) 3.1%.
• C) 0.48%.
• D) 6.7%.

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Definitions:

Consideration

In contract law, a crucial element that refers to something of value promised to another when making a contract.

Liquidated Debt

Debt for which there is no dispute between the parties about the fact that money is owed and the amount of money owed.

Enforceable Accord

An agreement that is legally binding and can be upheld in court.

Consideration

Something of value that is given by both parties to a contract as the agreed-upon price or exchange for the contractual promises.