Suppose the Nominal Interest Rate Is 6 Percent and the Expected

question 146

Multiple Choice

Suppose the nominal interest rate is 6 percent and the expected inflation rate is 4 percent.

• A)The dollar value of savings increases by 10 percent and the value of savings measured in goods is expected to increase by 6 percent
• B)The dollar value of savings increases by 10 percent and the value of savings measured in goods is expected to increase by 4 percent
• C)The dollar value of savings increases by 6 percent and the value of savings in goods is expected to increase by 4 percent
• D)The dollar value of savings increases by 6 percent and the value of savings in goods is expected to increase by 2 percent