If the interest rate is 10 percent per year, and you have $100,000 now, which of the following is closest to what your $100,000 will be worth in three years?

Liquidity is

A. The opportunity cost of purchasing a bond. B. Low for cash. C. Not important for bondholders. D. The ability of an asset to be converted to cash.

One family earned an income of $28,000 in 1995. Over the next five years, their income increased by 15 percent, while the CPI increased by 12 percent. After five years, this family's nominal income ________, and their real income ________.

A. decreased; increased B. increased; did not change C. decreased; decreased D. increased; increased