If you were a lender, which of the following unexpected changes in inflation would you prefer once you have issued a long term fixed rate loan?
a. An increase from 2% inflation to 6% inflation.
b. An increase from 7% inflation to 10% inflation.
c. A decrease from 14% inflation to 8% inflation.
d. A decrease from 6% inflation to 3%.
c
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GDP is supposed to measure
A) the volume of production within a country's borders. B) the volume of services generated within a country's borders. C) the volume of production of a country's output. D) GNP plus depreciation. E) net unilateral transfers from foreigners.
When the Fed decreases the money supply: a. aggregate demand and aggregate supply both increase
b. aggregate demand increases, which leads to movement along the short-run aggregate supply curve. c. aggregate demand decreases, which leads to movement along the short-run aggregate supply curve. d. aggregate supply increases, which leads to movement along the aggregate demand curve. e. aggregate supply decreases, which leads to movement along the aggregate demand curve.
The decline in output at the onset of the Great Depression was caused primarily by
a. a positive demand shock b. a negative demand shock c. a positive supply shock d. a negative supply shock e. simultaneous shocks to supply and demand
When firms internalize a negative externality, the market supply curve shifts to the left
a. True b. False Indicate whether the statement is true or false