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Nat2105 [25]
3 years ago
5

g You deposit $1,900 in your savings account that pays an annual interest rate of 3.25%. If the inflation rate is 1.09%, by how

much will your purchasing power increase in percentage terms
Business
1 answer:
gayaneshka [121]3 years ago
6 0

Answer:

Real purchasing power increase= 2.16%

Explanation:

Giving the following information:

You deposit $1,900 in your savings account that pays an annual interest rate of 3.25%. The inflation rate is 1.09%.

In this example, we have two different and opposite effects. The interest rate increases your purchasing power. If the inflation rate is 0, the purchasing power will increase (in one year) 3.25%.

The inflation rate decreases the purchasing power of nominal income.

Real purchasing power increase= annual interest rate - inflation rate

Real purchasing power increase= 3.25 - 1.09= 2.16%

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3 years ago
The Federal Reserve _____ the money supply to lower inflation.
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6 0
2 years ago
Read 2 more answers
At Sunland Company, events and transactions during 2020 included the following. The tax rate for all items is 20%. (1) Depreciat
e-lub [12.9K]

Answer:

B. $1673920

Explanation:

First calculate Total loss

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4 0
3 years ago
A reduction in the level of unemployment would have which effect with respect to the nation's production possibilities curve?
GREYUIT [131]

Answer:

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Explanation:

Here the falling in unemployment represents that there is a movement with respect to the resources that are fully employed.

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3 years ago
An automobile manufacturer learns about an ignition switch defect that may cause serious safety issues but rather than enact an
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Obstructionist Stance.

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