If the value of your savings is increasing over time, it must be true that the inflation rate:
A) is higher than the nominal interest rate.
B) is lower than the nominal interest rate.
C) is equal to the nominal interest rate.
D) is zero.

Question

Quizplus · Accepted Answer

If the value of savings is increasing, it means that the nominal interest rate is greater than the inflation rate. Therefore, the inflation rate is lower than the nominal interest rate.

If the Value of Your Savings Is Increasing Over Time