Suppose a borrower and lender agree to an interest rate on a loan when inflation is expected to be 6 percent. The borrower would benefit the most if which of the following inflation rates actually occurred?
A. 9 percent
B. 3 percent
C. 6 percent
D. 0 percent
Answer: A
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If you withdraw currency from your checking account for cash, you are
A) increasing M1, decreasing M2. B) increasing both M1 and M2. C) decreasing both M1 and M2. D) not affecting M1 or M2. E) increasing M1 but not affecting M2.
A price ceiling set above the equilibrium price causes quantity demanded to exceed quantity supplied
a. True b. False Indicate whether the statement is true or false
Suppose we observe that a firm's total revenue doesn't change when price and quantity change by the same percentage. Which of the following is a possible value of its price elasticity of demand?
A. 0 B. 0.5 C. 1 D. 2
One reason that education has external benefits is that
A) knowledge has diminishing marginal productivity. B) education creates job opportunities for teachers. C) education creates better citizens. D) property owners pay taxes to support the school system.