The difference between assets and liabilities is

The real interest rate is 4 percent and the nominal interest rate is 6 percent. Is there inflation or deflation? What is the inflation or deflation rate?

a. deflation; 2 percent b. deflation; 10 percent c. inflation; 2 percent d. inflation; 10 percent

Much of the U.S. government’s budget is tied to the Consumer Price Index (CPI), including Social Security benefits. Assume that the Social Security Administration (SSA) pays $980 million in benefits this year. If the CPI overstates inflation by 1 percent, how much money does the SSA stand to lose due to overpayments the following year?

a. $98,000 b. $980,000 c. $9.8 million d. $98 million