Suppose That Over the Past Year,the Real Interest Rate Was

question 57

Multiple Choice

Suppose that over the past year,the real interest rate was 3 percent and the inflation rate was 1 percent.It follows that

• A)the dollar value of savings increased at 2 percent,and the purchasing power of savings increased at 3 percent.
• B)the dollar value of savings increased at 2 percent,and the purchasing power of savings increased at 4 percent.
• C)the dollar value of savings increased at 4 percent,and the purchasing power of savings increased at 2 percent.
• D)the dollar value of savings increased at 4 percent,and the purchasing power of savings increased at 3 percent.

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Definitions:

Pupil

The opening in the center of the iris of the eye, through which light enters the eye.

Bright Light

Intense illumination that can affect various biological and psychological processes.

Unconditioned Response

An automatic and natural response that occurs in reaction to a stimulus without the need for prior learning.

Knee-Jerk Response

An automatic or reflexive reaction to a situation or stimulus, without engaging in deeper thought.