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In January 2013, You Can Put Your Savings in a Bank

Question 12

Multiple Choice

In January 2013, you can put your savings in a Bank of America account and be paid 2 percent per year. During 2013, suppose the inflation rate is 3.4 percent. In 2013 you earned a real interest rate of


A) 0.59 percent.
B) 6.8 percent.
C) 1.4 percent.
D) -1.4 percent.

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