You deposit​ $200 in a savings account on January​ 1, and the bank pays you interest of​ $10 at the end of the year.   During the​ year, the average price level rises by 2 percent.   What is the real interest rate on your savings​ account? The real interest rate on your savings account is​ _______.     A. 3 percent a year   B. 2 percent a year   C. ​$6   D. 6 percent a year

Essentials of Economics (MindTap Course List)
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ISBN:9781337091992
Author:N. Gregory Mankiw
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Chapter18: Savings,investment And The Financial System
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You deposit​ $200 in a savings account on January​ 1, and the bank pays you interest of​ $10 at the end of the year.
 
During the​ year, the average price level rises by 2 percent.
 
What is the real interest rate on your savings​ account?
The real interest rate on your savings account is​ _______.
 
 
A.
3 percent a year
 
B.
2 percent a year
 
C.
​$6
 
D.
6 percent a year
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