Bob deposits $100 in a bank account that pays an annual interest rate of 5 percent. A year later, Bob withdraws his $105 . If deflation was 5 percent during the year the money was deposited, then Bob's purchasing power has not changed
a. True
b. False
Indicate whether the statement is true or false
False
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If Mark tries to purchase a new refrigerator in a perfectly competitive market, then
A) he will have a very limited ability to negotiate over the price. B) he will have only a few sellers available to him. C) he will see large differences in the types of refrigerators sold across sellers. D) he will find himself constantly haggling with sellers over the price. E) None of the above is correct.
In the long-run, money market equilibrium determines
A) the real interest rate. B) the value of money. C) real GDP. D) the nominal interest rate E) velocity.
The drawback to calculating real GDP using base-year prices is that
A) relative prices change over time and these are not reflected in base-year prices, and this distorts GDP. B) quality changes are reflected in base-year prices. C) relative prices change over time and these changes are reflected in base-year prices. D) real GDP in one year is not comparable to real GDP in another year.
A country's imports of goods minus its exports of goods is reported in the goods balance
a. True b. False Indicate whether the statement is true or false