Which of the following is not correct?
a. If the inflation rate exceeds the nominal interest rate, then the purchasing power of an interest-earning deposit falls over time.
b. If there is deflation, then the purchasing power of an interest-earning deposit rises by more than the nominal interest rate over time.
c. The higher the rate of inflation, the smaller the increase in the purchasing power of an interest-earning deposit.
d. The purchasing power of an interest-earning deposit can increase or decrease over time, but it cannot stay the same.
d
You might also like to view...
As a result of trade between two countries which are of completely different economic sizes, specialization in the Ricardian 2X2 model tends to
A) be incomplete in both countries. B) be complete in both countries. C) be complete in the small country but incomplete in the large country. D) be complete in the large country but incomplete in the small country. E) sustain one countries economy in in direct proportion to the other.
In 2012, Ben Bernanke expressed which concern about persistently high unemployment?
A) It would result in high inflation. B) It would result in structural damage to the economy that would last for years. C) It would never decline to desired levels. D) It would cost him his job.
A shift from D1 to D2 causes equilibrium price to __________ and quantity to __________.
A. rise; rise
B. fall; fall
C. rise; fall
D. fall; rise
All else equal, compared to the case of a closed economy, monetary policy is ________ effective in an open economy with a ________ exchange rate.
A. more; flexible B. less; nominal C. less; real D. more; fixed