A-LevelEconomicsGovernment macroeconomic intervention9708/12 · Oct/Nov 2016 · Q201 Mark
In 2012, the rate of inflation in Botswana was 7.5%. Person X kept all of their savings in the form of cash while Person Y put their savings into a bank account on which they earned 5.0% interest. What was the effect on the real value of their savings by the end of the year? Person X Person Y A decrease decrease B decrease increase C no change decrease D no change increase
Adecrease
decrease
Bdecrease
increase
Cno change
decrease
Dno change
increase
✓ Correct answer
A: decrease decrease
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