INSTRUCTIONS: Read the questions that follow and answer to the best of your ability. Detailed explanations are provided following each question, so it is essential that you take the time to read and understand them.
1. It is January 1, 2017, and your bank tells you that the interest rate on your savings account is 2% for 2017 and the projected inflation rate for 2017 is 3%. At the end of 2017, would the money in the account buy more than it does today, exactly the same as it does today or less than it does today?