Focus on Personal Finance - 180 Day Option, 5th Edition

Which of the following is correct about inflation?

If inflation is 7% and your rate of return in your savings account is 4%, you will experience an overall gain in buying power

As the inflation rates increases, the interest rates offered to savers decrease

Inflation does not affect interest rates for savings accounts.

In order to increase buying power, you need to earn a rate higher than the rate of inflation.