Which of the Following Is Correct About Inflation

question 84

Multiple Choice

Which of the following is correct about inflation?

• A) If inflation is 7% and your rate of return in your savings account is 4%, you will experience an overall gain in buying power.
• B) As the inflation rates increases, the interest rates offered to savers decrease.
• C) Inflation does not affect interest rates for savings accounts.
• D) In order to increase buying power, you need to earn a rate higher than the rate of inflation.
• E) If you earn 5% and inflation is 10%, your buying power will increase.

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