What Is the Impact on a Checking Account's Purchasing Power

question 43

Multiple Choice

What is the impact on a checking account's purchasing power if it is earning 2% APY and inflation is 3% for the past year?

• A) Savings outpaced inflation by 1%
• B) Interest outpaced inflation by 1%
• C) Inflation outpaced savings by 1%
• D) The impact cannot be determined without knowing the balance

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Definitions:

Unconscious

The part of the mind not in current awareness but that influences feelings, thoughts, and behaviors.

Consciousness

Moment-by-moment awareness of ourselves, our thoughts, and our environment.

Inverted Spectrum

A hypothetical concept suggesting that people could perceive colors differently; e.g., someone's red might be another's blue, yet they function normally without realizing the disparity.

Color-Blind

The inability to discern certain shades of color or, in some cases, any color at all.