A lender need not be penalized by inflation if the
A. short-term rate of inflation is less than the long-term rate of inflation.
B. long-term rate of inflation is less than the short-term rate of inflation.
C. lender correctly anticipates inflation and increases the nominal interest rate accordingly.
D. inflation is unanticipated by both borrower and lender.
Answer: C
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Technological change can increase the demand for loanable funds because it
A) decreases the need for additional equipment. B) increases people's expected future disposable income. C) lowers the interest rate. D) has little effect on production cost. E) can increase the expected profit.
A single-price monopoly has marginal revenue and marginal cost equal to $19 at 15 units of output where the price on the demand curve is $38. At this output, average total cost is $15. What is the total profit earned?
A) $225 B) $285 C) $345 D) $570 E) $19
Information in a firm's financial statements
A) assists investors who are considering buying the firm's stock. B) helps the firm's managers make decisions. C) guide resource allocation in the economy. D) all of the above
Which of the following is part of the economic way of thinking? a. When an option becomes less beneficial, individuals will become more likely to choose it. b. Costs are incurred whenever scarce resources are used to produce goods or services
c. The value of a good is determined by its cost of production. d. Both a. and b. are part of the economic way of thinking.