ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Key Takeaways 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-2: -Elevated inflation discourages saving, since it erodes the purchasing power of the savings over time. That prospect can encourage consumers to spend and businesses to invest. As a result, unemployment often declines at first as inflation climbs.

Detailed explanation-3: -Savers. When inflation keeps rising, the Federal Reserve can’t change interest rates fast enough to keep up. This means that the money in your savings accounts gradually loses purchasing power.

Detailed explanation-4: -The true statement is option d) It refers to an increase in the average level of prices. The inflation over a given period signifies the general increase in the average price level of goods and services.