If a Bank Advertises 3 Percent Interest for a Checking

question 327

Multiple Choice

If a bank advertises 3 percent interest for a checking account and the anticipated rate of inflation is 3.5 percent

• A) the real rate of interest earned on the account is 0.5 percent.
• B) the real rate of interest earned on the account is -0.5 percent.
• C) the real rate of interest earned on the account is 6.5 percent.
• D) the real rate of interest earned on the account is 3.25 percent.

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