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Imagine that the interest rate on your savings account is 1 percent a year and inflation is 2 percent a year. After one year, would the money in the account buy more than it does today, exactly the same or less than today? More than it does today Less than today Exactly the same If interest rates rise, what will typically happen to bond prices? Rise, fall, stay the same, or is there no relationship? Stay the same Fall No relationship Rise


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