John borrowed $3,000 from his bank for one year at 4%. If the rate of inflation turned out to be 6%, what can you say about the bank's purchasing power from this operation, when the loan is paid back? O A. The bank's real purchasing power increased by 1.92%. O B. The bank's real purchasing power decreased by 10.24%. O C. The bank's real purchasing power decreased by 2.00%. O D. The bank's real purchasing power decreased by 1.89%.

John borrowed $3,000 from his bank for one year at 4%. If the rate of inflation turned out to be 6%, what can you say about the bank's purchasing power from this operation, when the loan is paid back? O A. The bank's real purchasing power increased by 1.92%. O B. The bank's real purchasing power decreased by 10.24%. O C. The bank's real purchasing power decreased by 2.00%. O D. The bank's real purchasing power decreased by 1.89%.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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