Suppose your bank pays you 5 percent interest per year on your ...

[WWatsford]

Suppose your bank pays you 5 percent interest per year on your savings account. If prices increase by 5 percent per year over that time, approximately how much real value do you gain by keeping 100 in the bank for a year?
 
  A) 0 B) 1 C) 3 D) 6

Question 2

The point of diminishing returns means that output will decrease at an increasing rate.
 
  Indicate whether the statement is true or false

[TINA]

Answer to Question 1

A

Answer to Question 2

FALSE