Which of the Following Is Not Correct

question 5

Multiple Choice

Which of the following is not correct?

• A)If the inflation rate exceeds the nominal interest rate,then the purchasing power of an interest-earning deposit falls over time.
• B)If there is deflation,then the purchasing power of an interest-earning deposit rises by more than the nominal interest rate over time.
• C)The higher the rate of inflation,the smaller the increase in the purchasing power of an interest-earning deposit.
• D)The purchasing power of an interest-earning deposit can increase or decrease over time,but it cannot stay the same.

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Definitions:

Economic Revival

Refers to the process of economic recovery following a period of recession or depression, marked by an increase in production, employment, and consumer spending.

New Federalism

A political philosophy that advocates for the transfer of certain powers from the federal government back to the states, aiming to increase local control and reduce the scope of federal authority.

General Revenue-Sharing

A federal program initiated in 1972 that provided state and local governments with funds to be used at their discretion, without specific requirements on how to spend them.