To diversify, a homeowner with a variable-rate mortgage should choose investments that
a. pay higher returns when interest rates rise and lower returns when interest rates fall.
b. pay lower returns when interest rates rise and higher returns when interest rates fall.
c. provide a higher return than the market average.
d. provide a lower return than the market average.
a
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
The record for the longest U.S. economic expansion started in March ______ and ended in March ______.
Fill in the blank(s) with the appropriate word(s).
A country has a comparative advantage when the opportunity cost of producing a good in terms of:
a. the monetary value of other forgone goods is lower than that of other nations. b. the monetary value of other forgone goods is greater than that of other nations. c. forgone output of other goods is higher than that of other nations. d. forgone output of other goods is lower than that of other nations. e. forgone output of other goods is equal to that of other nations.
During periods of deflation, the nominal interest rate will be a. higher than the real interest rate
b. lower than the real interest rate. c. the same as the real interest rate. d. possibly higher, lower, or the same as the real interest rate. The answer depends on how much deflation there is in the economy.