ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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then savers can still protect their saving.
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then savers cannot protect their saving.
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Either A or B
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None of the above
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Detailed explanation-1: -What that means is, if annual inflation continues at a rate of 7.5%, the prices of goods in the economy in general will double in just less than 10 years. Basically, once you jump above a rate of 7.2 percent, you’re doubling prices every decade (or sooner when it’s higher).
Detailed explanation-2: -Answer and Explanation: The calculated value of the real rate of return is 4.90%.
Detailed explanation-3: -The investor is losing money if the inflation rate exceeds the interest earned on a savings or checking account. The Consumer Price Index (CPI) is the most popular way to measure inflation in the United States.
Detailed explanation-4: -For example, if the rate of return for bonds you hold is 6% and the inflation rate is 3%, then the real rate of return will be 3%, not 6%.