If the Nominal Interest Rate Is Higher Than the Inflation

question 136

Multiple Choice

If the nominal interest rate is higher than the inflation rate,the value of your savings:

• A)will increase.
• B)will decrease.
• C)should remain about the same.
• D)Cannot say without knowing the beginning balance of savings.

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Definitions:

Prepaid Insurance

Expenses paid in advance for insurance coverages that extend beyond the current accounting period.

Posting References

Codes or numbers used to track the transfer of information from journals to ledgers in the accounting process.

Cash

A form of currency that companies and individuals use for transactions or to settle debts.

Journal Entry

is a record in accounting that notes the details of a financial transaction, including the accounts affected, debits, and credits.