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Question 2: This question tests knowing of inflation. Inflation refers to how much activities will cost this year than they did during the past year. Each year that there is inflation (which is money . year) your dollar will buy compared to it did the year before. Even though your money grows by earning interest, if the inflation minute rates are higher than your interest rate, approximately less purchasing power, and therefore will have the ability to buy reduce you will be year earlier to.

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