If the Real Interest Rate Relevant to a Bank Account

question 164

Multiple Choice

If the real interest rate relevant to a bank account is 5 percent and the expected inflation rate is 4 percent,then after a year a person expects to have,relative to today,

• A)9 percent more dollars in the bank account, which will purchase 5 percent more goods.
• B)5 percent more dollars in the bank account, which will purchase 4 percent more goods.
• C)5 percent more dollars in the bank account, which will purchase 4 percent more goods
• D)4 percent more dollars in the bank account, which will purchase 1 percent more goods.

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Definitions:

Antisocial Personality Disorder

A mental health disorder characterized by a disregard for other people, often presenting with manipulative, deceitful, or aggressive behaviors.

Anhedonia

The diminished ability to experience pleasure or interest in previously enjoyable activities.

Social Norms

Implicit or explicit rules that a group of people follows, reflecting what is considered appropriate behavior within that group.

Deceitful Behavior

Actions that are intentionally dishonest or manipulative to gain an advantage or mislead others.