Which of the following is correct about inflation?
A) If inflation is 7% and your rate of return in your savings account is 4%, you will experience an overall gain in buying power.
B) As inflation rates increase, interest rates offered to savers decrease.
C) Inflation does not affect interest rates for savings accounts.
D) In order to increase buying power, you need to earn a rate higher than the rate of inflation.
E) If you earn 5% and inflation is 10%, your buying power will increase.
Correct Answer:
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