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 8 percent, and the purchasing power of savings increased at 6 percent. b. the dollar value of savings increased at 8 percent, and the purchasing power of savings increased at 4 percent. c. the dollar value of savings increased at 4 percent, and the purchasing power of savings increased at 6 percent. d. the dollar value of savings increased at 4 percent, and the purchasing power of savings increased at 8 percent.
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Ответ:
d
Explanation:
Nominal interest rate = real interest rate + inflation rate
6 - 2 = 4%
Inflation is a persistent rise in the general price levels
Types of inflation
1.demand pull inflation – this occurs when demand exceeds supply. When demand exceeds supply, prices rise
2.cost push inflation – this occurs when the cost of production increases. This leads to a reduction in supply. Higher prices are the resultant effect
if inflation declined by 2 percent, it means purchasing power increased by 2%.
Total increase in purchasing power = 6 + 2 = 8
Ответ:
Explanation - you are in food business. You are meeting with team members to decide what her or not o participate