The nominal rate of interest tends to rise during time of inflation because
A. lenders require a higher rate in order to loan out money.
B. borrowers are willing to pay a higher rate to obtain loans.
C. loans are taken in "cheap" dollars but paid back in dollars of greater purchasing power.
D. lenders require a higher rate in order to loan out money AND borrowers are willing to pay a higher rate to obtain loans.
D. lenders require a higher rate in order to loan out money AND borrowers are willing to pay a higher rate to obtain loans.
You might also like to view...
According to the Taylor rule, the Fed should:
a. lower the fed funds rate by 2.0% if inflation rises 1.0% above its target of 1.0%. b. raise the fed funds rate by 2.0% if inflation rises 1.0% above its target of 1.0%. c. lower the fed funds rate by 0.5% if inflation rises 1.0% above its target of 2.0%. d. raise the fed funds rate by 0.5% if inflation rises 1.0% above its target of 2.0%.
The prisoner's dilemma game:
A. is a zero sum game. B. is a game of chance. C. is a game with a stable equilibrium. D. is a game with no dominant strategies.
Social insurance
a. is the basis for most government redistribution programs. b. is usually community-rated with premiums based on ability to pay. c. is the basis of the provision of medical care to the poor, elderly, and other vulnerable population groups in the U.S. d. requires mandatory participation to be effective. e. all of the above.
According to Piketty, economic history is the story of a race between:
a. capital accumulation b. population growth c. technological progress d. all of the above e. a and c only