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

question 109

Multiple Choice

Suppose that over the past year,the real interest rate was 3 percent,the CPI was 126.2 at the beginning of the year,and the CPI was 129.5 at the end of the year.It follows that

• A)the dollar value of savings increased at 5.6 percent,and the purchasing power of savings increased at 3 percent.
• B)the dollar value of savings increased at 0.4 percent,and the purchasing power of savings increased at 3 percent.
• C)the dollar value of savings increased at 3 percent,and the purchasing power of savings increased at 5.6 percent.
• D)the dollar value of savings increased at 3 percent,and the purchasing power of savings increased at 0.4 percent.

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Definitions:

Reduction

The process of decreasing the amount, size, or intensity of something.

Invoices

Official documents issued by a seller to a buyer, detailing the products or services sold, their prices, and the total amount owed.

Trade Discount

A reduction in the list price granted by wholesalers or manufacturers to retailers or other buyers in the same trade to encourage bulk purchasing.

Suggested List Price

Refers to the price that manufacturers propose retailers sell a product for, serving as a guideline.