Inflation favors
A. lenders.
B. borrowers.
C. neither borrowers nor lenders.
D. both borrowers and lenders.
B. borrowers.
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A positive spending shock ________ real interest rates and ________ output in the short run, thereby its effect on stock prices is ________
A) raises; lowers; positive B) raises; raises; ambiguous C) lowers; raises; negative D) lowers; raises; positive
An increase in the money supply shifts the LM curve to the right, causing the interest rate to ________ and output to ________, everything else held constant
A) rise; rise B) rise; fall C) fall; rise D) fall; fall
All firms in a perfect competition industry
A. produce identical products. B. lose money. C. produce differentiated products. D. are price makers.
Jack wants to buy a new house. But the surge in housing demand over the last few months has led to a sharp increase in housing prices making it impossible for him to afford one on his current income. This is an example of a ________
A) positive externality B) negative externality C) pecuniary externality D) conspicuous externality