When inflation is much higher than expected, which of the following is true?
a. Nominal incomes are lower than expected.
b. Real interest rates are higher than expected.
c. Income is redistributed from those whose expenditures are fixed toward those who receive a fixed income.
d. Nominal interest rates are lower than expected.
e. Real interest rates are lower than expected.
e
You might also like to view...
As the real interest rate increases, the quantity of saving supplied ________ and the quantity of saving demanded ________.
A. increases; decreases B. does not change; does not change C. increases; increases D. decreases; increases
The things that must be forgone to acquire a good are called
a. implicit costs. b. opportunity costs. c. explicit costs. d. accounting costs.
Which of the following statements is NOT true about economic growth?
A. Growth generally means that overall the members of the nation are better off materially. B. When growth occurs the production possibilities curve shifts outward. C. Growth represents an increase in a nation's productive capacity. D. Growth is measured as the overall level of real GDP.
Distinguish between the nominal and real rates of interest using an example
What will be an ideal response?