Under which one of the following situations would you be better off?
A. You have $10,000 in your savings account paying 5 percent per year and unanticipated inflation is 8 percent per year.
B. You lend a friend $1,000 at 6 percent to be repaid in one year and unanticipated inflation is 7 percent during the year.
C. You have paid $500 for a $1,000 U.S. savings bond that matures in 10 years and unanticipated inflation is 10 percent per year.
D. You borrowed $2,500 at 7 percent to pay for this year's college expenses and unanticipated inflation is 12 percent during the year.
Answer: D
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A firm will tend to select the least costly input combination to produce its output.
Answer the following statement true (T) or false (F)
In the balance of payments, all of the following are deficit items EXCEPT
A) imports of merchandise. B) funds placed in foreign depository institutions. C) sales of dollars to foreigners. D) tourism expenditures abroad.
The expenditure method dictates that GDP is equal to C + I + G + (X M)
a. True b. False Indicate whether the statement is true or false
Which of the following would lead to a decrease in the supply of watches?
a. An increase in the price of watches b. A decrease in the price of watches c. A decrease in the expected future price of watches d. None of the above