Arnold puts money into an account.One year later,he sees that he has 7 percent more dollars and that his money will buy 3 percent more goods.Which of the following is consistent with these facts?
A) The nominal interest rate was 7 percent,and the inflation rate was 4 percent.
B) The nominal interest rate was 7 percent,and the inflation rate was 3 percent.
C) The nominal interest rate was 10 percent,and the inflation rate was -4 percent.
D) The nominal interest rate was 4 percent,and the inflation rate was -3 percent.
Correct Answer:
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