Unanticipated positive inflation
A. benefits banks.
B. hurts debtors.
C. hurts everyone.
D. hurts creditors.
Answer: D
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The impact of the multiplier effect is to:
a. smooth out the up and down swings of the business cycle. b. promote price stability. c. magnify small changes in spending into much larger changes in real GDP. d. reduce the impact of an increase in investment on output and employment.
The long-run industry supply curve in perfect competition is derived from the
a. short-run industry supply curve which shifts as new firms enter the industry. b. short-run industry supply curve which shifts as old firms exit the industry. c. freedom of firms from sunk costs so that new cost curves become long-run curves. d. All of the above reasons.
For a given level of reserves, an increase in the reserve requirement ratio will
A) decrease legal reserves and decrease the money supply. B) increase legal reserves and decrease excess reserves. C) increase legal reserves and increase excess reserves. D) increase excess reserves and increase the money supply.
Which of the following is a potential cost of long-run growth?
A. Resource exhaustion B. Increased unemployment C. Higher trade surplus D. Higher budget deficits