In periods of high inflation,
a. people want to hold on to as much money as possible.
b. the purchasing power of money is decreasing.
c. nobody wants to work and earn income.
d. low nominal interest rates are likely to result.
e. nobody wants to buy goods and services.
b
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Which of the following best describes a monetary policy tool?
A. interest rates B. taxes C. household savings D. government spending
A circular flow model shows the interrelationship between the ________ markets and the ________ markets
A) expenditure; income B) household; goods C) business; household D) goods; factor E) household; factor
Higher nominal interest rates ________ the amount of money demanded and a higher price level ________ the amount of money demanded.
A. decrease; decreases B. decrease; increases C. increase; decreases D. increase; increases
Eliza wants to borrow $100 from Sandy. Sandy wants to make 4% real return on his money, so they both agree on a 4% interest rate paid next year. Eliza and Sandy did not anticipate any inflation, yet the actual inflation turned out to be -5% next year. In this case
A. Eliza will pay an 9% real interest rate. B. Eliza will pay a 4% nominal interest rate. C. Sandy is better off. D. all of the above.