If you believe that the inflation rate is likely to be high over the next ten years, you would want to
a. have a pension with raises indexed to the CPI if you were going to be retiring
b. obtain a variable rate mortgage
c. not obtain any fixed rate consumer loans
d. pay off all of your existing fixed rate loans
e. be a shareholder of a bank because their profits are going to increase dramatically
A
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The Ricardian proposition that international trade will benefit any country ("gains from trade") as long as the world terms of trade do not equal its autarkic relative prices is a straightforward and powerful concept
Nevertheless, it is impossible to demonstrate empirically. Why?
Why do consumers benefit from pay-as-you-go social security?
A) It keeps inflation in check as money is redistributed. B) It is a better way than taxes to finance the government. C) It forces people to save more than they would otherwise. D) With sufficiently high population growth, many young contribute to the benefits of the old.
Suppose the short-run supply curve is a straight line of slope +1 that intersects the origin. The long-run supply curve will be
A) horizontal. B) steeper. C) shallower. D) vertical.
Microsoft's success over Apple although Apple had a technologically superior product is the result of:
a. increasing returns in a network-based business b. Microsoft's economies of scale over a wide range of output c. the revenue sources derived from Microsoft's intellectual property d. superior marketing and promotions e. all of the above