If a bank has already lent money at fixed interest rates, then during a period of higher-than-expected inflation, it experiences
A. Hyperinflation.
B. Deflation.
C. Negative real income effects.
D. Rising real interest rates.
Answer: C
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Which of the following is true of the dominant strategy equilibrium?
A) A dominant strategy equilibrium always leads to the best outcome for each player. B) A dominant strategy equilibrium cannot be a Nash equilibrium. C) A dominant strategy equilibrium is a Nash equilibrium if each player chooses a strategy that is a best response to the strategies of others. D) A dominant strategy equilibrium occurs if the sum of the players' payoff is zero.
A natural monopoly regulated with a marginal cost pricing rule results in
A) an economic loss for the regulated firm. B) an economic profit for the regulated firm. C) a normal profit for the regulated firm. D) a deadweight loss.
Which will be TRUE for a monopolistic competitor experiencing short-run losses?
A) P > ATC B) P = ATC C) P < ATC D) P < MC
Which of the following is likely to happen to the demand curve for reserves if the federal funds rate increases?
A) The demand curve for reserves will shift to the right. B) The demand curve for reserves will shift to the left. C) There will be an upward movement along the demand curve for reserves. D) There will be a downward movement along the demand curve for reserves.