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

question 64

Multiple Choice

Suppose that over the past year,the real interest rate was 6 percent and the inflation rate was -2 percent.It follows that

• A)the dollar value of savings increased at 4 percent,and the purchasing power of savings increased at 6 percent.
• B)the dollar value of savings increased at 4 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 4 percent.
• D)the dollar value of savings increased at 8 percent,and the purchasing power of savings increased at 6 percent.

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Definitions:

Flooded

Flooded describes areas that have been overwhelmed with water beyond normal levels, due to natural phenomena like heavy rains or failure of man-made structures.

Floodplain

Flat land adjacent to a river, prone to flooding during periods of high discharge, which can deposit nutrient-rich sediments beneficial for agriculture.

Mississippi River

one of the longest rivers in North America, flowing southward from its source in Minnesota to the Gulf of Mexico.

Thompson River

The Thompson River is a major tributary of the Fraser River, flowing through the British Columbia interior in Canada, known for its scenic beauty and importance to local ecosystems.