If the Value of Your Savings Is Increasing Over Time

question 110

Multiple Choice

If the value of your savings is increasing over time, it must be true that the inflation rate:

• A) is higher than the nominal interest rate.
• B) is lower than the nominal interest rate.
• C) is equal to the nominal interest rate.
• D) is zero.

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Definitions:

Inspects

To look at something or someone closely and carefully in order to discover information, especially about their quality or condition.

Pays

Relates to the act of settling a debt or fulfilling an obligation, particularly in the context of rendering payment for services or goods received.

Installment

Regular payments made over a period of time until the total debt is paid.

Substantially Impair

To significantly weaken or reduce the ability, value, or function of something.