The classic loser from an unanticipated inflation is
A) the borrower who pays less nominal interest than expected.
B) the borrower who pays more nominal interest than expected.
C) the saver who earns less real interest than expected.
D) the saver who earns more real interest than expected, and so should have saved more.
C
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The output losses from an adverse inflation shock are ________ and the output losses from a fall in potential output are ________.
A. large; small B. small; large C. permanent; temporary D. temporary; permanent
A major difference between a single-price monopolist and a perfectly competitive firm is that the
A) monopolist can maximize profit by setting the price of the output where demand is inelastic. B) monopolist can always increase its profits by increasing the price of its output. C) monopolist's marginal revenue is less than price. D) monopolist is guaranteed to earn an economic profit.
The difference between nominal and real exchange rates is:
A) absolute prices. B) foreign prices. C) domestic prices. D) ratio of domestic prices to foreign prices.
Where does equilibrium occur in an income expenditure diagram? What would be the effect if production is at either on the left or right side of the equilibrium point?