If the real value of your savings decreases over time:
A) the real rate of interest is positive.
B) inflation is zero.
C) the real rate of interest is negative.
D) the real rate of interest is zero.

Question

Quizplus · Accepted Answer

The real value of savings decreases over time when inflation is higher than the nominal rate of interest. This means that the real rate of interest is negative, as the nominal rate of interest is not keeping up with the rate of inflation.

If the Real Value of Your Savings Decreases Over Time