If the rate of inflation is greater than the interest rate,
A)you should consume all of your wealth in the first period.
B)you are better off keeping your money in a mattress at home (assuming no risk of it being stolen)than at a bank.
C)you will necessarily consume less this period than you would if the rate of inflation were less than the interest rate.
D)you will necessarily consume more this period than you would if the rate of inflation were less than the interest rate.
E)None of the above.

Question

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The Answer of If the rate of inflation is greater than the interest rate,
A)you should consume all of your wealth in the first period.
B)you are better off keeping your money in a mattress at home (assuming no risk of it being stolen)than at a bank.
C)you will necessarily consume less this period than you would if the rate of inflation were less than the interest rate.
D)you will necessarily consume more this period than you would if the rate of inflation were less than the interest rate.
E)None of the above.

If the Rate of Inflation Is Greater Than the Interest