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

question 117

Multiple Choice

Suppose that over the past year,the real interest rate was 5 percent and the inflation rate was 3 percent.It follows that

• A)the dollar value of savings increased at 5 percent,and the purchasing power of savings increased at 2 percent.
• B)the dollar value of savings increased at 5 percent,and the purchasing power of savings increased at 8 percent.
• C)the dollar value of savings increased at 8 percent,and the purchasing power of savings increased at 2 percent.
• D)the dollar value of savings increased at 8 percent,and the purchasing power of savings increased at 5 percent.