Assume that there is a fixed rate of interest on contracts for borrowers and lenders. If unanticipated inflation occurs in the economy, then:
What will be an ideal response?
lenders are hurt, but borrowers benefit
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The simple immigration model assumes that the capital stock is constant in each country. If this assumption is relaxed, then the:
A. Rise in business income in the low-wage country will increase the return on capital, which will increase the demand for labor B. Fall in business income in the low-wage country will decrease the return on capital, which will decrease the demand for labor C. Rise in business income in the low-wage country will decrease the return on capital, which will decrease the demand for labor D. Fall in business income in the low-wage country will increase the return on capital, which will increase the demand for labor
Four possibilities have probabilities 0.4, 0.2, 0.2 and 0.2 and values $80, $30, $0, and -$80 respectively. The expected value is:
a. $22 b. $24 c. $26 d. $28
Determinants of the price elasticity of supply are:
A. availability of inputs, adjustment time. B. flexibility of the production process, whether the good is a luxury or a necessity. C. availability of inputs, whether the good is a luxury or a necessity. D. adjustment time, whether the good is a luxury or a necessity.
In Venezuela, the government has implemented price controls on cornmeal, and the resulting shortage created a black market for the product. When compared to the competitive equilibrium, this situation has resulted in a transfer of ________ to black
market sellers. A) only consumer surplus B) both consumer surplus and producer surplus C) only producer surplus D) deadweight loss