If the rate of inflation remains constant at 3 percent, what will happen to the value of a sandwich over 10 years?A.The value will decrease.B.The cost will decrease.C.The value will increase.D.The cost will stay the same.SUBMITarrow_backPREVIOUS
Question
If the rate of inflation remains constant at 3 percent, what will happen to the value of a sandwich over 10 years?A.The value will decrease.B.The cost will decrease.C.The value will increase.D.The cost will stay the same.SUBMITarrow_backPREVIOUS
Solution
The value of the sandwich will decrease. This is because inflation erodes the purchasing power of money over time. If the rate of inflation is 3 percent, it means that every year, the same amount of money will buy 3 percent less than it did the previous year. So, over 10 years, the value of the sandwich will decrease because the same amount of money will buy less sandwich than it did 10 years ago. Therefore, the correct answer is A. The value will decrease.
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