Multiple Choice
Suppose the annual nominal interest rate is 7 percent and the inflation rate is 7 percent. If you deposit $1,000, at the end of the year:
A) your purchasing power will have increased.
B) your purchasing power will have stayed the same.
C) your savings will have a nominal decrease.
D) your purchasing power will have decreased.
Correct Answer:
Verified
Correct Answer:
Verified
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