Consider borrowers and lenders who agree to loans with fixed nominal interest rates. If inflation is higher than what the borrowers and lenders expected, then who benefits from lower real interest rates?
a. Only the borrowers benefit.
b. Only the lenders benefit.
c. Both borrowers and lenders benefit.
d. Neither borrowers nor lenders.
a
You might also like to view...
Surplus refers to:
A. the difference between the price at which a buyer or seller would be willing to trade and the actual price. B. the difference between the willingness to pay and the actual price paid. C. the difference between the willingness to sell and the actual price accepted. D. All of these are true.
Claude's Copper Clappers sells clappers for $40 each in a perfectly competitive market. At its present rate of output, Claude's marginal cost is $39, average variable cost is $25, and average total cost is $45 . To improve his profit/loss situation, Claude should
a. increase output b. reduce output but not to zero c. maintain the present rate of output d. shut down e. raise the price
In response to the financial crisis which followed the housing bubble collapse, policy-makers feared stimulating demand would cause:
A. inflation. B. deflation. C. stagflation. D. hyperinflation.
In 1910 _____________ of children between the ages of 10 and 15 had jobs, but by 1920, this percentage had fallen to ____________
a. 50 percent; 25 percent b. 30 percent; 20 percent c. 20 percent; less than 10 percent d. 10 percent; less than 1 percent