Which of the Following Is Not Correct

question 5

Multiple Choice

Which of the following is not correct?

• A)If the inflation rate exceeds the nominal interest rate,then the purchasing power of an interest-earning deposit falls over time.
• B)If there is deflation,then the purchasing power of an interest-earning deposit rises by more than the nominal interest rate over time.
• C)The higher the rate of inflation,the smaller the increase in the purchasing power of an interest-earning deposit.
• D)The purchasing power of an interest-earning deposit can increase or decrease over time,but it cannot stay the same.

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