Suppose the Nominal Interest Rate Was 5 Percent and the Inflation

question 19

Multiple Choice

Suppose the nominal interest rate was 5 percent and the inflation rate was 3.5 percent.

• A) The dollar value of savings increased at 1.5 percent, and the value of savings measured in goods increased at 3.5 percent.
• B) The dollar value of savings increased at 3.5 percent, and the value of savings measured in goods increased at 1.5 percent.
• C) The dollar value of savings increased at 3.5 percent, and the value of savings measured in goods increased at 5 percent.
• D) The dollar value of savings increased at 5 percent, and the value of savings measured in goods increased at 1.5 percent.