If Andrew is paid an interest rate of 10% on his savings account, but the inflation rate is 20%, the nominal value of his savings account is

Question

Quizplus · Accepted Answer

The nominal value of Andrew's savings account is rising because the nominal interest rate is 10%, which means the amount in the account is increasing by 10% regardless of inflation. However, the real value is decreasing due to inflation.

If Andrew Is Paid an Interest Rate of 10% on His