Which of the following is likely to be true if the inflation rate is positive in an economy?
A) The purchasing power of the returns from investments are likely to decline.
B) The purchasing power of the returns from investments are likely to increase.
C) The nominal interest rates are likely to decline.
D) The real money supply is likely to increase.

Question

Quizplus · Accepted Answer

When inflation is positive, the value of currency decreases, meaning the purchasing power of any returns from investments is likely to decline as well.

Which of the Following Is Likely to Be True If