If inflation is lower than what was expected,
a. creditors receive a lower real interest rate than they had anticipated.
b. creditors pay a lower real interest rate than they had anticipated.
c. debtors receive a higher real interest rate than they had anticipated.
d. debtors pay a higher real interest rate than they had anticipated.
d
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Unlike economic profit, economic rent:
A. only applies to land. B. may not be driven to zero by competition. C. doesn't involve opportunity costs. D. can be less than zero.
Consider two countries—A and B. Economy A is a command economy, while economy B is a market economy. Given this information, which of the following statements is likely to be true?
A) Both economies are likely to grow at the same rate. B) Both economies are likely to stagnate without any increase in GDP. C) Institutions in economy A are likely to be more inclusive than institutions in economy B. D) Institutions in economy B are likely to be more inclusive than institutions in economy A.
Other things equal, contractionary fiscal policy will lead to:
a. an increased budget deficit (assuming an initial budget deficit). b. a reduced budget surplus (assuming an initial budget surplus). c. an expanded budget surplus (assuming an initial budget surplus). d. increased government purchases.
Paul and Maggie advertise for a babysitter. Jenny is the only one who answers the ad and she's hired. She asks for $7 per hour and gets it. She occasionally thinks of raising the rate to $10 but is afraid that Paul and Maggie will decide to advertise again. This tale is analogous to
a. monopolistic competitive pricing b. the idea of nationalization c. contestable markets d. laissez-faire e. creative destruction