Which one of the following groups benefits from inflation?
a. Borrowers.
b. Savers.
c. Landlords.
d. Lenders.
a
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Outline the policy choices for contractionary and expansionary options of the Fed
In response to the severe recession of 2008-2009, the Fed
a. expanded the monetary base and pushed short-term interest rates sharply higher. b. reduced the size of the monetary base and pushed short-term interest rates sharply higher. c. more than doubled the size of the monetary base and pushed short-term interest rates to near zero. d. more than doubled the size of the monetary base and pushed short-term interest rates to a historic high.
Exhibit 8-12 Marginal revenue and cost per unit curves
As shown in Exhibit 8-12, the firm will shut down in the short-run at a price below:
A. OA. B. OB. C. OC. D. OD.
Suppose a new cost-saving device will forever generate $1,000 net savings per year to a firm. The device costs $10,000. Using the Internal Rate of Return approach, will the firm make the investment?
A) definitely B) definitely not C) if the interest rate exceeds 10% D) if the interest rate is less than 10%