What is important to remember regarding inflation and interest rates?

Question

(1 point)
Inflation reduces the value of money. The interest rate of the savings account should be subtracted from the inflation rate to understand its affect on the value of the balance.
Inflation causes the balance in your accounts to decline.
Interest rates on savings accounts are usually high enough to counterbalance inflation.
Inflation rates are not usually high enough to offset the growth of balances due to interest rates

Answer 1

Inflation reduces the value of money. The interest rate of the savings account should be subtracted from the inflation rate to understand its effect on the value of the balance.