Suppose the annual rate of inflation has been 3 percent during each of the last three years and that borrowers and lenders have come to expect this rate of inflation. If the inflation rate unexpectedly rises,
a. borrowers gain at the expense of lenders.
b. lenders will gain at the expense of borrowers.
c. the real interest rate will exceed the nominal interest rate.
d. there is no reason to expect that the inflation will help borrowers relative to lenders.
A
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Although a corporation is the most common type of firm, corporations generate only a small share of business revenue in the U.S. economy
Indicate whether the statement is true or false
The view held by Arthur Laffer and Ronald Reagan that cuts in tax rates would encourage people to increase the quantity of labor they supplied became known as
a. California economics. b. welfare economics. c. supply-side economics. d. elasticity economics.
If there is a 5 percent increase in the CPI, then there will most likely be
A) a more than 5 percent rise in the cost of living because of the introduction of new goods. B) a 5 percent rise in the cost of living. C) a less than 5 percent rise in the cost of living because of consumers substituting away from goods whose relative prices rise towards other goods. D) a more than 5 percent rise in the cost of living because of consumers substituting away from goods whose relative prices rise towards other goods. E) a less than 5 percent rise in the cost of living because of falling quality of goods over time.
If real GDP per person were equal to $1,000 in 1900 and grew at a one percent annual rate, what would be the value of real GDP per person 100 years later?
A. $11,000 B. $13,780 C. $1,100 D. $2,705