Which of the statements below is FALSE?
A)The real interest rate is the reward for waiting.
B)Nominal interest rates are the sum of two major components: the real interest rate and expected inflation.
C)The reward for postponing consumption implies that at the end of the year you will be able to buy more goods.
D)The prices of goods and services tend to decrease over time because of inflation.

Question

Quizplus · Accepted Answer

The statement that "The prices of goods and services tend to decrease over time because of inflation" is false. Inflation typically leads to an increase in prices over time, not a decrease.

Which of the Statements Below Is FALSE