Mary takes out a fixed interest rate loan and then inflation rises more than expected. The real interest rate she pays is
A. higher than she'd expected, and the real value of the loan rises.
B. higher than she'd expected, and the real value of the loan falls.
C. lower than she'd expected, and the real value of the loan rises.
D. lower then she'd expected, and the real value of the loan falls.
Ans: D. lower then she'd expected, and the real value of the loan falls.
You might also like to view...
An oligopoly model in which sellers compete on prices rather than quantities is called a ________ model
A) Bertrand B) Cournot C) Ricardian D) Keynesian
Alan could most directly apply the principles of economic decision making with respect to his job when:
A. deciding how to spend his paycheck. B. deciding which girl to marry. C. deciding what to have for dinner after a long day at work. D. deciding which route on his way to work is the most scenic.
When economists observe someone make a choice, they assume the individual chooses:
A. what gives her the least utility. B. what gives her the most utility. C. what creates the most utility for society. D. what is the most efficient choice.
If the nominal gross domestic product (GDP) for a year is $5.4 trillion, and the real gross domestic product (GDP) for the same year is $3.6 trillion, the GDP price index is _____
a. 0.667 b. 150 c. 66.67 d. 50 e. 33.33