Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account?
a. More than today
b. Exactly the same
c. Less than today
d. I do not know

If i save $100 at 1% per annum after 1 year I will get $101, but with inflation rate of 2%per annum a commodity that is worth $100 now will be worth $102 after 1 year so u can't buy same commodity I can buy today after 1 year even when my money has increase.

Answer Link

Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account? a. More than today b. Exactly the same c. Less than today d. I do not know

Respuesta :

Otras preguntas

Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account?
a. More than today
b. Exactly the same
c. Less than today
d. I do not know