# ECONOMICS (CBSE/UGC NET)

## ECONOMICS

### AGGREGATE DEMAND

 Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
If infl. is 7%, this means the value of money is declining by 7% a year. If int. rates are 9%,
 A then savers can still protect their saving. B then savers cannot protect their saving. C Either A or B D None of the above
Explanation:

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%.

There is 1 question to complete.