If inflation increases unexpectedly, then:
A. lenders tend to lose.
B. borrowers tend to lose.
C. neither borrowers nor lenders tend to lose.
D. lenders and borrowers tend to gain.
Answer: A
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Which of the following is the most likely to cause the price of air travel to rise?
a. Lower prices and improved service in Amtrak (the nation's passenger railroad). b. Improved productive efficiency resulting from airline mergers. c. Higher airplane fuel costs. d. Reports that air travel safety is deteriorating.
Raising the federal funds rate shifts the aggregate demand curve ________, so that real GDP________ and the price level ________
A) rightward; increases; rises B) leftward; decreases; rises C) rightward; increases; falls D) leftward; increases; rises E) leftward; decreases; falls
From the economic point of view, why might a retired couple spend four hours a day on the golf course when they could have spent their time becoming better informed about their elected representative in Congress?
A) They are going to die soon so it really doesn't matter. B) They must love golf and hate politics. C) The congressperson must have wronged them. D) They consider golfing a more productive use of their time.
Suppose you plan to hold a stock for one year. You expect that, in one year, it will sell for $30 and pay a dividend of $3 per share. If your required return on equity is 10%, what is the most you should be willing to pay for the share today?
A) $3.30 B) $23 C) $30 D) $33