Suppose you borrow $5,000 at an interest rate of 8%. If the expected real interest rate is 3%, then the rate of inflation over the upcoming year that would be most beneficial to you would be
A) 0%.
B) greater than 0% but less than 5%.
C) equal to 5%.
D) greater than 5%.
D
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Refer to Figure 17-2. Suppose the Fed used contractionary policy to push short-run equilibrium to point C. If the short-run equilibrium remained at point C long enough,
A) the economy would move back to point A. B) the economy would stay at point C in the long run. C) the short-run Phillips curve would shift down. D) the short-run Phillips curve would shift up.
The most a monopolist can sell at any given price is:
A. the amount he alone can supply the market with. B. the amount demanders are willing to buy at that price. C. constrained by the availability of inputs. D. less than if it were a perfectly competitive market.
Suppose fish steak and spaghetti are the only alternatives available during lunch hours at an office cafeteria. If a nominal change in the price of fish steak brings about a prominent change in the demand for spaghetti we can conclude that the latter has a high demand elasticity
Indicate whether the statement is true or false
If Country A's central bank wanted to increase the value of its currency, its reserves account in the balance of payments would:
a. Become more negative. b. Become more positive. c. Not change. d. Change only if there were no offsetting changes in the net errors and omissions account.